VAT- Value added tax was first introduced and implemented in the UAE on 1 January 2018. The major aim of this new law is to provide high-quality public services and for the government to help move toward its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.
The UAE’s Value Added Tax (VAT) was implemented for the fourth year in January 2022. VAT implementation has transformed the UAE’s regulatory system, directing a new era of increased compliance. From its initial start in 2018 to October 2021, the government recently disclosed that the total income distributed at the state level in the UAE for VAT has topped AED 95.4 billion. VAT subordination has become a need for organisations, and VAT experts in Dubai have assisted them effectively.
If you are confused about tackling this situation or need more information regarding these VAT updates, you need to hire a consultancy firm for Tax Consultancy services.
If you are confused about tackling this situation or need more information regarding these VAT updates, you need to hire a consultancy firm for Tax Consultancy services.
A consultancy firm like NH Management offers not only tax consultancy services but also Corporate Advisory Services & Financial Planning Services to assist foreigners, entrepreneurs, and organisations in the UAE by providing advice on starting or sustaining their businesses in a new market.
Here is a quick guide to VAT obligations for businesses in the UAE. The company that is newly registered with Federal Tax Authority for VAT is supposed to meet some obligations in terms of tax. However, failing to comply with the guidelines and rules will lead to a hefty fine that may damage the reputation and cause a loss of money.
Pick the VAT Registration’s Scope
The first thing that the businesses in UAE must do is identify if they fall within the scope of VAT in the United Arab Emirates. If the total value of taxable supplies and imports in the initial 12 months surpassed the required registration level of AED 375,000, or if the supplies and imports are expected to reach the necessary point in the next 30 days, your company must register for VAT in the UAE.
It is recommended to get advice from a tax consultant in Dubai for Corporate Advisory Services before applying for registration in all circumstances.
Keep Your VAT Records & Documents
According to Article 2 of Cabinet Decision (36) of 2017 on Executive Regulation on Tax Procedures, businesses must keep tax records for at least five years. However, depending on the nature of the firm, the term of record-keeping for VAT in the UAE may vary. A tax consultancy firm in the UAE can assist you in meeting your record-keeping requirements. The following are the important records that are must to maintained in the UAE:
- Documentation of the company’s supply and imports of services & products.
- The company receives tax invoices, Credit notes, or any other alternative document.
- Records of products and services that the firm has disposed of or utilised for non-business purposes, including VAT amounts paid on those goods and services.
- Records of products and services that haven’t had any input tax deducted
- Records of the company’s exports of goods and services
- Accounts or tax bills that have had modifications or corrections made to them.
- Records of account modifications or corrections, as well as Tax Invoices
Produce tax invoices for all taxable items and services
Businesses making taxable supplies must issue an original tax invoice and transmit it to the recipient of goods and services, according to Article (65) of VAT Decree-Law No. (8) of 2017. Suppose the receiver of goods and services is available. In that case, VAT registrant individuals making deemed supplies must issue an original tax invoice and send it to them or maintain it in their records if there is no recipient of goods and services.
The information on the tax invoice must be included:
- The term ‘Tax Invoice’ is used (in clear writing)
- Name, address, and tax registration number of the provider (TRN)
- The serial or applicable Tax Identification Number (TIN) aids in identifying the Tax Invoice and its number in a batch of invoices.
- Issuance date
- If the supply date differs from the issue date,
- Specifications of the delivered goods or services
- For each commodity or service, the unit price, number or size of supplies, applicable VAT rate, and due amount (in AED)
- Any offered discount rates
- The total amount owing in AED
- Taxes are payable in AED at the current exchange rate.
- If the receiver requests a tax computation, the invoice must include such information, according to Article 48 of the Law.
Submit Tax Returns on Time
The FTA usually assigns three-month tax periods (quarterly) for filing tax returns. However, if the Authority believes it is essential, it might define shorter or longer durations. Tax registrants must file their VAT returns in the UAE by the 28th day after each Tax Period. Otherwise, if the original Vat return day occurs on a holiday or weekend, they can submit the return the next working day. Since the UAE began changing weekends in January 2022, you must review your tax return dates to guarantee compliance. VAT specialists or Tax consultants in Dubai can assist you in submitting your VAT returns on time.
Settle your Payable Taxes on Time
VAT registrants in the UAE must pay any taxes due on their tax return due date. Therefore, registrants must make every effort to pay their taxes before the deadline and avoid paying on the last day. However, by delaying the payment, you run the danger of experiencing unexpected circumstances, such as a bank’s failure to complete the money transfer. Your best partner in this paperwork is a consultancy firm that can offer you Financial Planning Services in Dubai to assist you in paying your taxes well in advance of the deadline.
How can NH Management help you?
The businesses in the UAE need to consult the right Tax consultants in Dubai who have full knowledge and experience in the field. At NH Management, we ensure you that we can quickly solve all queries related to VAT & Tax returns of the businesses.
With a spectrum of company advancements, strategic collaborations, and investments, NH Management provides full Tax Consultancy Services and Corporate Advisory Services with customer attention centred on particular industries and clients’ needs.
Regardless of the sector or industry, our broad expertise and deep industry experience in Financial Planning Services can assist you in resolving the most complicated difficulties facing your company. For a comprehensive selection of Tax Consultancy Services in Dubai, please call us immediately at +971 4 524 7888.
