6th ICC UAE Trade Finance Conference VAT Impact on the UAE Banking Industry 20 Nov 2017 This presentation is for only for illustrative purpose, it does not constitute an advice. Pls seek MCA consent prior to any circulation.

VAT Applicability in the Banking Industry An explicit fee; discount; commission; rebate;or a similar type of charge. Standard Rate Supply of financial services to a recipient established outside the GCC. Supply of investment grade precious metals Zero Rated Financial services if remunerated by way of an implicit margin. Exempt Fee / Commission / Charge Operation of Bank Money Transfers Mortgages Investment Banking Card Related Currency Exchange Loans, Advances and Credit Examples of Standard Rated Financial Services provided to Overseas customers gold, silver, platinum at purity level of 99.9% and tradeable in global bullion markets Examples of Zero Rated Lending, Deposit and Life Ins products Trading in Shares, Bonds, Derivatives and Forex Examples of Exempt Services VAT Impact on the UAE Banking Industry

Input Tax apportionment Recoverable Input Tax_______ * Mixed InputTax Recoverable + Non Recoverable Input Tax Input tax If directly attributable to taxable supplies Yes Fully recovered VAT return submission - on line. Given to understand the return should be in Arabic and English. Supporting documents can be in English If directly attributable to Exempt supplies Not eligible No Yes Proportionate basis No VAT Impact on the UAE Banking Industry

Input Tax apportionment - Special Method - Partial Exemption Prior approval from FTA is required for use of any special method. Output value Based Taxable supplies_______ Taxable and Exempt supplies 1. x Residual Input Tax Taxable transaction count Total transactions count 2. Transaction Method x Residual Input Tax 3. Sectoral Method Some sectors Some sectors Output Method Transaction Method Company VAT Impact on the UAE Banking Industry

Contacts Girish Chand Director T + 971 4 331 9501 T + 971 50 5528079 402, Al Rostamani Tower “A” Sheikh Zayed road PO Box 3168, Dubai-UAE T + 971 4 331 9501 F + 971 4 331 9502 W www.consultmca.in www.mca.co.in 601 Al Salaam Towers Hamdan Street Abu Dhabi, UAE T + 971 50 5528079 Affiliate to: Aug 2017

THANK YOU Aug 2017