Excise & VAT Accounting Services

The FTA is the official UAE regulatory authority that collects taxes and conducts tax audits throughout the Emirates. The Federal Tax Authority has set the appropriate enforcement regulations for the Tax Procedure Law for all UAE taxpayers. It requires registered companies to keep a number of records and provide information to ensure compliance with tax laws. There are two main taxes in the UAE, one is VAT and the other is excise duty, both of which require expert compliance. Tax compliance requires expert insight, which is why our team provides quality excise and VAT accounting services in Dubai, Sharjah, Abu Dhabi, Ajman, Fujairah, and other Emirates. First, let’s get to know the regulatory requirements in detail.

UAE Tax Accounting Regulations

Under the UAE tax laws, every taxable entity is obliged to keep accounting records for both excise duty and VAT.  The FTA requires that the accounting records must be kept for at least 5 years. The supervisory authorities may at any time check the compliance of your tax records in accordance with the Tax Procedures Act. If the tax authorities find errors in the information or delays in submitting the information, they will impose administrative tax penalties on the registrant. The penalty for non-compliance for failure to keep records or accounts in accordance with UAE tax laws is AED 10 000 for the first time and AED 50 000 for repeated offences. Professional tax advice in the UAE is recommended to keep records and avoid excise duty and VAT fines and penalties.

What is VAT accounting?

VAT accounting is concerned with the recording of value-added tax in a company’s account. VAT accounting is simply carried out to assess compliance with the VAT rules in accordance with the FTA guidelines. It includes documents, VAT calculations, history of filing returns for specific tax periods, and other information recorded in the VAT accounting software. The accuracy and compliance of VAT data are verified in accordance with UAE tax law. As this is mandatory, the taxpayer is advised to take advice on any VAT services in Dubai, UAE, and to comply with the country’s tax regulations.

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VAT rates in the UAE

• According to the UAE tax procedure law, the value-added tax is calculated based on a different rate for each of the following categories:
• The standard rate (5%) is applied to food, cars, cosmetics, clothing, etc.
• A zero rate (0%) is applied to certain exported products, imported precious metals, residential buildings, and many other public services.
• An exempt rate is applied to certain financial services, transport, undeveloped land, and other goods and services covered by VAT laws.

Documents required for VAT accounting

In order to keep VAT-compliant accounts, a registered business must prepare certain verified documents in accordance with the legal requirements. There is a list of documents that need to be prepared, for example:

• Annual accounting books and VAT accounting journals.
• Credit and debit notes.
• A total number of tax invoices issued and received.
• A statement of all external supplies and imports.
• Records of exported goods and services together with invoices.
• Accounting of adjustments or corrections to accounts.
• Details of input and output tax on imported and delivered goods.

What are the excise duty accounts?

The arrangements and requirements for accounting for excise duty are different from VAT, but share the common objective of ensuring compliance with government regulations. Excise duty accounting involves compliance of excise goods with rates, registration, and submission of excise duty returns along with detailed documentation. Proper maintenance of excise duty records will reduce the tax burden on the FTA registrant. This will enable the authorities to verify compliance with UAE tax laws and regulations. You can avail the suggestions for excise services in UAE and prepare for the authorities’ inspection in the near future.

Documents required for excise accounting

Excise duty accounting requires careful documentation to ensure compliance with UAE tax laws. Here we mention some of them:

• Excise duty reporting in accordance with FTA standards.
• Information on the tax collected on excisable goods.
• Report on excisable goods produced, imported and stored.
• Submission of the excise duty return for each tax period.
• Records of all damaged or lost excise goods.

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Why outsource your tax accounting?

Bookkeeping and accounting are essential parts of every small and medium-sized business. Tax accounting is one of the most important types of accounting that must be accurate and compliant with national tax laws. The Federal Tax Authority (FTA) is responsible for overseeing all tax matters in all Emirati territories. Organizations must deal effectively with the complex VAT and excise tax regimes, otherwise, a small error can lead to heavy penalties. Accounting departments must implement regulatory guidelines to ensure tax compliance.

This is sometimes a complex and difficult task for ordinary tax agents and accountants. It is advisable to outsource excise and VAT accounting services in Dubai, Abu Dhabi, Sharjah, and the UAE.  Tax consultants will fulfill all accounting and financial reporting requirements under UAE tax laws.

Benefits of excise and VAT accounting services

Systematic and well-organized tax accounting is essential to comply with regulatory obligations. Excise and VAT-compliant accounting services offer a number of advantages to taxable companies in the UAE, such as:

1. Ensuring tax compliance

Up-to-date and error-free excise and VAT accounting are mandatory to ensure compliance with FTA regulations. It serves as a checklist to ensure that all tax-related documents are submitted on time and comply with UAE tax laws. In addition, tax consultants check the VAT accounting software and make recommendations where necessary.

2. Minimize administrative penalties

As FTA registered companies are obliged to maintain proper accounting records. Such compliance with the statutory provisions minimizes the risk of administrative penalties by the government.

3. Ensure timely filing of returns

Filing tax returns is a complex procedure due to the limited tax deadline. However, tax advisers in the UAE will assist individuals and companies to file excise and VAT returns in accordance with FTA guidelines. The team will inform you of any errors in previous filings and submit them within the prescribed tax period.

4. Reduce the burden of FTA audits

Accounting statements compliant with UAE tax laws would remove many uncertainties. This proactive approach reduces the burden on taxpayers from unexpected FTA investigations.

5. Helps in risk assessment

Excise and VAT accounting services provide a statistical overview of an organization’s financial position. As a result, management will be able to identify risks earlier and prepare better tax policies and strategies for the future.

Do not hesitate to contact a leading accounting and tax advisory firm in Dubai to prepare your accounts in compliance with UAE tax laws.