Mr Al Zaabi said: „For example, the agreement should stipulate that the applicable tax does not contain VAT or tax on all relevant taxes, and that the trader reserves the right to collect VAT or other taxes that can be brought into the country at any time during the term of the contract.“ Overall, a right of termination is provided when the contract to be terminated does not include this specific right of early termination and a separate termination agreement is concluded. According to the Court of First Instance, this meant that the contract (taking into account the entire history of turnover) was regarded as a silence on VAT, which resulted in the price being included in vat. Ahmad Al Zaabi, acting director of consumer protection at Dubai Economy, said gyms and other clubs could only collect VAT or other taxes on contracts signed last year „if the documented contract terms provide for the same“. The beneficiaries of these payments want the termination payments to be expressed as VAT, so that the payer finances the VAT element. The payer, in particular when operating in a VAT-exempt transaction, where the recovery of input VAT is problematic, wants the payment to be made, including VAT. A common trap to avoid is that contracts that remain silent on VAT are considered VAT-free, meaning that the beneficiary will receive less money than expected if VAT has to be paid. VAT legislation does not contain much about contracts, as trade agreements are a matter of agreement between the supplier and the customer. However, if VAT is not mentioned, the price paid is normally considered to be VAT included. This means that the contractor/supplier has to pay VAT on the amount agreed in the contract, which would reduce his profits. When a VAT contract is silent, it usually means that the price includes VAT.

Therefore, it is generally unlikely that the exercise of a right of termination under a force majeure clause will in itself attract VAT, given that the right of termination already exists in the original contract and cannot be carried out later. . . .