Dubai court obliges man to pay law firm Dhs150,000 as VAT on its Dhs3m fees

Dubai Civil Court ordered a man to pay Dhs150,000 as 5% value-added tax (VAT) on legal fees amounting to Dhs3 million, after the court previously obliged him to pay the agreed-upon fees to a legal firm that represented him in a judicial dispute.

The case dates back to the time when a man agreed with a legal firm to represent him legally in a lawsuit in which he was required to pay Dhs30 million, in return for professional fees of Dhs3 million.

The firm allegedly handled the legal procedures and represented him before the court but when it requested him to pay its fees, he responded via email asking for a grace period for payment, but he did not pay, which prompted the firm to file a lawsuit.

In July, the court ordered him to pay Dhs3 million, in addition to 5% legal interest from the date of the judicial claim until payment, along with fees, expenses, and lawyer fees.

After the judgment was issued, the firm submitted a request stating that the court had overlooked ruling on its request regarding the 5% value-added tax on the fees, as the previous judgment did not include this request.

Consequently, the court accepted the request, explaining that the fee agreement included the appellee's obligation for expenses, and therefore VAT at a rate of 5% was due on them.

Accordingly, the court ordered the appellee to pay Dhs150,000 as the VAT on the awarded fee amount, besides the fees and expenses of the omission request.