Will salons, spas get costlier with VAT in Dubai?
Starting from January 1, 2018, consumers in the UAE will be charged extra for all the services. But is salon included?
Residents thinking about changing their hairstyle or going for a massage at the spa, will now have to pay more for such services, experts have said.
Starting from January 1, 2018, consumers in the UAE will be charged extra for all the services offered at beauty parlours, barber shops, nail salons, makeup boutiques, and spas, as a result of the value added tax (VAT).
Speaking to Khaleej Times, Anurag Chaturvedi, senior director at Crowe Horwath, explained that salons and barber shops offer services such as grooming and personal care that fall under the consumption tax.
"Starting from the new year, places such as salons and beauty parlours will be raising their prices under the VAT," he said. "Many of them will have the change in prices listed on their service brochures and shown on the bill."
Experts have also noted that the increase in price for grooming and personal care services offered at barber shops and parlours will not be much of a financial burden on residents, since the rate is set at five per cent. However, the biggest impact will be felt at boutiques that offer bridal service bundles, which are priced for thousands of dirhams.
The GCC countries have agreed to levy the VAT in the region to help reduce their dependence on oil and other hydrocarbon products as a source of revenue. The UAE and Saudi Arabia will implement VAT from 7am on January 1 under the framework agreed among the GCC countries, while Oman and Kuwait have decided to postpone it till 2019.
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