The value-added tax (VAT) is regarded as a mandatory consumption tax on all products and services in the country. Consumers are ultimately responsible for paying the VAT on the goods and services they consume. The final consumer is the one who bears the expense of the VAT, which is assessed on the use or consumption of goods and services. In the UAE, taxable supplies of goods or services are subject to a 5% VAT charge on tax-registered firms at each stage of the supply chain. In some cases, there are also some exemptions to VAT in the UAE. For more clarifications, it's better to consult VAT Consultants in Abu Dhabi.
Businesses must register for VAT if their taxable supply and imports are AED 375,000 (USD $1,000) or more. According to UAE VAT law, companies having taxable imports and supplies between AED 187,500 and AED 375,000 are eligible to voluntarily apply for VAT registration. Businesses that have taxable supplies and imports under AED 187,500, however, are exempt from filing for VAT registration. Additionally, it should be noted that all names—whether those of a firm, its owner, manager or an authorised person—must be written in correct Arabic alongside English. The following are the documents needed to apply for VAT registration in the UAE:
● Trade licence copy
● Passport-size photocopies of the entrepreneur and business partners
● Copy of the owners' and partners' Emirates IDs
● Memorandum of Association (MOA) of the company and Articles of Association (AOA)
● Business contact details
● Bank account details
● Business type
● Expected turnover in the coming 30 days
● The monthly income statement for the entire year of 2017 in FTA format
● Emirates IDs, passports, and other papers with authorised signatures
In a VAT return, the tax authority simply states how much VAT needs to be paid or refunded. The amount of VAT that must be paid or returned by the tax authorities is simply stated in the VAT return filing. Each quarter, companies file a VAT return, which enables them to track the proper financial route. To prevent fines that can get in the way of your business operations, it is preferable to be VAT compliant. You must submit VAT returns at least once every three months. However, there are specific situations when companies may need to file VAT returns monthly. Implementing the VAT filing procedure or becoming VAT compliant gives your company legal security and protects it. In terms of tax payments, VAT has the advantage of preventing financial losses.
The purpose of maintaining VAT records is to make it simpler for management and the government to track current information regarding VAT filing and prevent unauthorised tax payments. Companies that are VAT registered must keep their books of records for at least five years. The book of records comprises invoices for sales and purchases; debit and credit notes; import and export notes; accounting records; zero-rated purchases and supplies; and items issued for non-commercial use. With an expert team, we at GAAP Associates offer top VAT consulting services in the UAE. Our team of VAT specialists has extensive local knowledge of VAT accounting, VAT filing, VAT refunds, and all other VAT-related rules and regulations in the UAE.
The process of deregistering for VAT, also known as cancelling or terminating VAT registration, is typically undertaken by businesses when they need to cancel their VAT registration with the Tax Authority. When a firm has to revoke its VAT registration with the Tax Authority, it normally completes a VAT deregistration process, also known as cancellation or termination of VAT registration. Companies must select one of two categories before filing for VAT deregistration, and their decision will be based on a variety of factors. There are two types of VAT deregistration services. The categories for VAT deregistration are as follows:
If the business stops engaging in economic activity, stops producing taxable supplies or is no longer considered a legal entity, a taxable person must submit a deregistration application within 30 days.
A taxpayer may choose to deregister for VAT if their taxable sales volume over the previous 12 months is within the voluntary and mandatory thresholds, or if the amount of their taxable sales throughout the following 12 months (including this month) falls between the voluntary threshold and the mandatory threshold.
Tax evasion is the illegal practice of reducing the amount of tax due to the federal government so that the business entity is liable for paying fewer taxes.
A tax-credit note is a record that a provider issues to a client that details a reduction from the original cost of the products or services provided.
According to the decree-law, the authority can reimburse the taxpayer for the tax amount.