Value Added Taxation is a form of indirect taxation imposed upon a taxpayer (an individual or legal entity) by a governmental organization to fund government exchequer. As a nature the VAT is all encompassing and results in increasing the cost at the consumption stage. A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed. UAE has set the VAT rates at 5 per cent on a host of products and services, but certain segments have been exempted. The law also assigns responsibilities to eligible resident taxable persons including non- residents and investors and their agents as well as nominated representatives who will have to register and ensure specified compliance.
Businesses crossing the exemption threshold are required to mandatorily register under UAE VAT. A turnover of AED 375,000 has been set as the mandatory threshold limit for getting registered. A voluntary registration can be applied if the entity has crossed a sublimit of AED 187,500 and anticipates of reaching the mandatory threshold. In UAE VAT any person conducting business is not allowed to have more than one Tax Registration Number (TRN), unless otherwise prescribed under in the UAE Executive regulation, hence you are required to hold one VAT registration even if you operate in different emirates through multiple branches.
All registered entities or individuals should file VAT returns in the FTA portal before the assigned due date. All procedural and documentary test should be made according to the VAT law before submitting the returns.
Our expert team will conduct a VAT health check to evaluate the procedural and arithmetic accuracy of your books in accordance with the provisions of the VAT law. Our tailor-made VAT review packages examines the correctness of the VAT transactions thus help you identify the associated risks and opportunities.
A Business that fails to reach the voluntary turnover limit of AED 187,500 in the immediate past 12 months is required to deregister from VAT. This rule is to prevent the loss of revenue to government exchequer by allowing non eligible businesses to claim refund of input tax. Failing to deregister within the stipulated time will attract penalties.
We provide specific VAT training sessions to staff and business owners across a multitude of industries in the UAE. Our tailor-made training packages are designed to cover the VAT law structure, Applications of VAT rules, Clarificatory notes, Practical scenarios and Compliance procedures thus helps you build a self-reliant and well educated inhouse team. Our subscribers are updated real-time on latest amendments and rulings.