The imposition of Value Added Tax (VAT) recently in UAE has a considerable impact on businesses. If you are still unaware, the implementation of VAT requires the companies to pay 5% as per the standard rate tax except for the exempted business with effect from 1 January 2018. The tax was first implemented in the Kingdom of Saudi Arabia followed by the government of the United Arab Emirates in coordination with GCC countries. So, if you are running a business in any city in the UAE, you must register for VAT. However, many companies are facing issues regarding fulfillment VAT registration requirements in UAE as they are not familiar with the process and methods. In such a situation it is better to hire the best VAT consultancy in Dubai to get all essential information and consultancy related to VAT registration and payment methods. Besides this, consider reading this post to get instant information regarding VAT regulations! VAT Registration Requirements in UAEMany UAE based businesses are ignoring the importance of VAT owing to lack of proper knowledge. It is true that a few businesses are exempted from tax, but others have to pay. However, registration criterion may be the same for all companies operating in the UAE. The registration for VAT is expected to be done based on the size of business as recommended by the Federal Tax Authority UAE. It is the registrant body for VAT also. The process is divided into three phases. So, it is better to get adequate information about UAE VAT registration requirements to avoid any penalties or deductions. Consider the given information for detail: Mandatory Registration for VATIf the annual revenue of a business organization is equal or greater to AED 375000, VAT registration is compulsory. The company should comply with tax regulation by registering under the respective department of the FTA department. Voluntary Registration for VATThe business companies earning more than AED 187,500 or more should voluntarily register for taxpaying under the VAT. VAT Exempted BusinessesIf you are confused about VAT registration, consider that if your business revenue is less than the amount AED 187,500, you are exempted from VAT registration. VAT Registration Documents RequirementsNot every business organization pays attention to perform accounting and booking keeping activities especially the small companies and freelancers. But, it is imperative to understand that VAT registration requires the businesses to have the following documents:
Final ThoughtSumming up, preparing for VAT registration requires the companies to be highly pro-active in maintaining tax records and other documents. This is not a piece of cake because you have to provide proof of every decision made regarding the financial management of businesses.
It is, therefore, suggested to hire the best VAT consultancy in Dubai for error-free preparation of all documents to fulfill VAT registration requirements in UAE. Don’t forget to provide the nitty-gritty of your business to get help by the experts comprehensively!
1 Comment
Owing to the revised laws and policies of the UAE government regarding VAT laws, many businesses are registering for Value Added Tax. A general awareness related to the benefits of VAT registration has come to light following the new policies regarding reclaiming input VAT and tax in general. With more and more businesses growing and building operations in the region, input VAT reclamation has created confusion among sellers about the general procedure, benefits, and pitfalls. However, experts in the area can help you out in not only the calculation of VAT, but also in enhancing your business and boosting your business profile. All you need is the best VAT consultancy in Dubai to help you out. Read on to know some important pitfalls that you need to consider. Issues to Consider while Reclaiming Input VATConsidering the multifaceted structure of input tax for business, it’s essential to have experts on your side to help you identify problems and create workarounds to promote your business and also develop a good reputation. Read on to know which some common-issue with the reclamation of VAT: 1- Reclamation before RegistrationIt's critical to reclaim the maximum amount of input tax on business expenses. The VAT incurred before the business registers for VAT is ignored more too often. However it’s also essential to know about the allotted time that allows backdating of VAT before registration. It’s important to note that: only the businesses registered for VAT can reclaim VAT purchases and the claims made must be related to VAT taxable supplies and products. 2- Duplication of InvoicesDuplication is often a very common input tax error mainly due to the increased usage of computers, photocopiers and other devices to generate invoices. It's essential to steer away from proforma invoices when reclaiming input VAT. 3- Transposition in InputsCommon error whether genuine or careless, resulting in the smallest change in digits can be extremely costly for the company. To avoid input errors it’s essential to ensure error free setting up of spreadsheets along with data inputs. Apart from that vigorous rechecking system should be in place to ensure that the data being input is accurate. 4- Partial ExemptionIn the case that a business has a mixture of exempted and taxable supplies, it is only partially exempted and business needs to claim input tax for the taxable supplies. Numerous businesses may never realize that they are partly exempted or do not have the knowledge to help them calculate partially exempted input tax. 5- Entertainment Costs for BusinessesThe VAT on entertainment costs for business may also often be very confusing. In a general perspective, reclaiming input VAT is not permissible for business entertainments unless it's being given to overseas customers or employees. For example: Food, drinks, accommodation, tickets, sporting events facilities and entries are all used for entertainment purposes. 6- Tax Reclamation for CarsIt’s possible to reclaim input tax on cars, in the case that one of the following applies:
7- Missing Links with Taxable TransactionsThe absence of a link to taxable transaction input tax deduction is only possible, in case the purchased goods or services are directly linked to a taxable transaction. Expert advice may often be needed to determine the nature of the exchange. ConclusionRegardless soft the age of businesses, it’s critical to register for VAT due to the many benefits, however, the complicated and most layered structure of VAT in UAE makes it impossible to figure it out without expert help. Opt for the best VAT consultancy in Dubai, and you're safe from all the pitfalls mentioned above and more concerning reclaiming input VAT. Less financial losses and fines mean more reputable and reliable business!
|
AuthorWrite something about yourself. No need to be fancy, just an overview. Archives
November 2019
Categories
All
|