What is VAT?
Value Added Tax (VAT) is an indirect tax system introduced in more than 160 countries around the world. Since its adoption in the UAE in 2018, many businesses are struggling to cope with its complexities. vat consultants in Dubai are collected at all stages of the supply chain, and each actor involved is responsible for ensuring VAT compliance. VAT-registered companies only collect and pay VAT on behalf of the government and the final VAT impact is borne by the end consumer. Simple as this may seem, complex scenarios arise which require expert advice and opinion in the UAE to ensure compliance.
Given the heavy penalties and sanctions that non-compliance entails, every business seeks the best VAT consultancy services in Dubai. Fortunately, Bestax Chartered Accountants have assembled a team of top tax experts and the best VAT consultants in UAE with years of experience who can provide you with top-notch VAT consultant services in the UAE while you focus on growing your business.
Also, Check: VAT Compliant Bookkeeping
VAT Registration Requirements:
Voluntary registration: Any business or individual that has exceeded the voluntary registration threshold of AED 187,500 in the last 12 months or expects to exceed this threshold in the next 30 days is eligible to voluntarily register for VAT.
Mandatory registration: Any company or individual exceeding the mandatory threshold of AED 375 000 must register for VAT within 20 working days of exceeding this threshold, failing which a penalty of AED 10 000 for late VAT registration will apply.
As mentioned above, the law sets out the criteria for compulsory and voluntary VAT registration for businesses. However, in some cases, it may be appropriate for a company to register for VAT registration services in Dubai at an early stage, even if it does not meet the criteria for compulsory registration. Once registered, such businesses can claim input tax on all taxable expenses and purchases, thereby reducing their costs by 5%. In addition, being VAT registered also increases your credibility with your clients and creates a positive image on the market.
How Can Bestax Chartered Accountants Help?
The procedure for registering a VAT consultancy company in Dubai requires the applicant to submit a set of documents and information (in English and Arabic) to the Federal Tax Authority. If these documents are incomplete or the information provided is incorrect, this can significantly delay the registration process.
At Bestax Chartered Accountants, we assist our clients with value-added tax registration services and VAT Consultancy Services in UAE as follows:
- VAT Compliance assessment.
- Preparation of a checklist of required documents and information.
- Processing of the registration application after a thorough examination by our tax experts.
- Assistance with follow-up issues until the FTA issues the TRN.
By taking these precautions, we ensure that your consultancy registration is submitted in the best possible way so that approval is not delayed beyond a reasonable time.
Also, Check: Excise Tax Registration in UAE
VAT implementation serves as a foundation stone for your business before it starts conducting financial transactions. Although it may seem very simple, a small discrepancy or misunderstanding of the VAT decree-law can lead to major errors in VAT calculation, resulting in heavy fines and penalties from the authority.
- Our top tax experts in the UAE understand the importance of implementing VAT in your business and provide the following services in this regard:
- Detailed analysis of your business model
- Review of existing contracts and recommendations for changes
- Assess the applicability of VAT to your business transactions.
- Assistance in implementing VAT-compliant accounting software
- Advising on the accounting requirements imposed by the FTA
- Identification of business-specific tax risks
- Filing VAT returns
Depending on your company’s annual turnover, you may be required to submit periodic VAT returns to the FTA as follows:
- Monthly VAT filing: Turnover above AED 150 million
- Quarterly VAT return filing: Turnover below AED 150 million
However, the FTA may, at its discretion, set different VAT periods for different businesses.
Taxable businesses are required to submit VAT returns to the FTA periodically and usually within 28 days of the end of the relevant VAT period. Failure to meet the deadlines may result in additional VAT penalties for late filing and payment of VAT returns. These returns must accurately calculate the VAT figures relating to standard, zero-rated, exempt, reverse charge, export, and import transactions.
Our tax experts, qualified chartered accountants, and VAT consultants in Dubai UAE provide our clients with the following VAT return services in the UAE:
- Ensuring that a well-maintained accounting system is in place
- Review of all business transactions and relevant VAT laws
- Reviewing all processes and recommending any necessary changes
- Reviewing documentation to ensure compliance with VAT requirements e.g. contracts, invoices, etc.
- Calculated figures are consistent with supporting documents.
- Verification of compliance with input VAT claims
- Maximum possible input tax claim
- Early submission of VAT returns
- Assistance with subsequent FTA requests related to VAT returns submitted.
VAT Compliant Accounting
The dynamics of accounting have changed significantly since the introduction of the UAE. Businesses are now required to keep VAT-related records for at least 5 years as required by the FTA. As VAT is a self-assessment tax, the FTA obliges businesses to keep their accounting records in full compliance and easily accessible to any audit by the authorities.
Our team of qualified chartered accountants, who have a strong knowledge of VAT and accounting services, ensure that our clients’ books are always up to date and that they are reconciled with the VAT returns submitted.
Our team of top accountants and tax experts from the best VAT consultancy services in the UAE assist clients as follows
- Preparation and review of VAT-compliant accounting records
- Reconciliation of internal accounting records with submitted VAT returns
- Maintaining accounting records in accordance with FTA requirements.
- Weekly and monthly checks to ensure up-to-date records.
- On-site visits for physical verification of documents
- Advice and assistance to organizations submitting supporting documents under the FTA.
- Advice on necessary changes
- VAT refunds
Where businesses have more input VAT than output VAT, their net VAT position is refundable to the government. In addition, businesses that purchase taxable goods or services domestically and zero-rate exports are also refunded VAT by the government. In order to claim such refunds, the FTA has set up a gateway to submit VAT refund applications together with a set of supporting documents and related information. Adopting proper tax procedures is the key to successful VAT registration.
Bestax Chartered Accountants provides the following VAT refund services in the UAE
- Preparation and processing of VAT refund claims
- Ensuring the completeness of the application package in accordance with FTA requirements.
- Submission of the VAT refund application
- Assisting with subsequent FTA claims up to the VAT refund approval stage.
We ensure that the application package is complete and meets the FTA’s specific requirements before processing the VAT refund application to avoid unnecessary delays or rejections by the authority.
Dubai Expo 2020 VAT Refund
The UAE government has recently issued Cabinet Decision No. 1 2020 on “Refund of VAT paid on goods and services related to Expo 2020 in Dubai”. Under this scheme, participating companies can recover VAT paid on the import or supply of certain goods and services, even if these companies are not registered for VAT in the UAE. The Law sets out certain conditions, criteria, and procedures for claiming VAT refunds for Dubai Expo 2020 participants.
Our top tax specialists in the UAE provide the following services in this area
- Assessing eligibility criteria
- Preparation of the necessary documentation
- Application for a Certificate of Entitlement
- Submission of VAT refund application
- Assistance with follow-up issues until the refund is approved and credited to your bank account.
- VAT exclusion from the register
The FTA has set a certain condition when companies need to cancel their tax registration number. A company must apply for cancellation of its VAT registration in the following cases:
- If the company’s Taxable transactions in the last 12 months are below the voluntary threshold of AED 187 500, it must apply for deregistration within 20 days of such an event. If the company ceases to make taxable supplies.
- If a company fails to submit a timely application for cancellation of VAT registration, it may be subject to a penalty of AED 1,000 for each month of delay.
Our best tax advisors in Dubai understand the importance of VAT deregistration and assist clients with the following services to ensure a smooth and speedy VAT deregistration filing in accordance with FTA requirements.
- Assessment by a VAT consultancy in Dubai Deregistration Criteria
- Submission of the VAT deregistration application
- Assistance in the provision of VAT advisory services following inquiries received by the FTA regarding VAT deregistration
- Review of VAT penalties
There may be unfortunate cases where the FCA may impose large fines and penalties on a firm for various reasons, such as late payment of tax, late submission of a VAT advice return, late VAT registration, or application for cancellation of VAT advice, or non-compliance with other FCA rules. Any person or business receiving such penalties may request a VAT review within 20 working days of the decision. The Authority will consider the application and may cancel the penalties if the firm proves that they are justified. Get more information on VAT penalties and sanctions.