Dubai Court Orders Man to Pay Dh150,000 VAT on Dh3M Legal Fees

A Dubai court has ordered a man to pay Dh150,000 in value-added tax (VAT) on Dh3 million in legal fees awarded to a law firm that represented him in a judicial dispute.

 

The Dubai Civil Court had previously ordered the man to pay the law firm Dh3 million in professional fees, after he failed to settle the agreed amount for legal services provided in connection with a lawsuit involving a claim of Dh30 million.

 

The case began after the man entered into an agreement with the law firm to represent him in the dispute in return for professional fees of Dh3 million.

 

The firm subsequently handled the legal proceedings and represented him before the court. However, when it sought payment of its fees, the man responded by email requesting additional time to settle the amount. He nevertheless failed to make the payment, prompting the firm to take legal action.

 

In July, the court ordered the man to pay Dh3 million, together with 5% legal interest from the date the lawsuit was filed until the amount was fully paid. He was also ordered to pay court fees, expenses and lawyers' fees.

 

Following the judgment, the law firm submitted a request to the court, arguing that its claim for 5% VAT on the legal fees had not been addressed in the earlier ruling.

 

The court accepted the request and clarified that the fee agreement required the man to bear the expenses arising from the legal services. As VAT is applicable at a rate of 5%, the court found that the tax was payable on the awarded legal fees.

 

The court therefore ordered the man to pay an additional Dh150,000, representing 5% VAT on the Dh3 million legal fees, along with the fees and expenses associated with the request to rectify the omission in the earlier judgment.