VAT-Compliant Bookkeeping Services In UAE

Since 2018, the Value Added Tax (VAT) applies to all taxable individuals and businesses. The FTA mandates that exempted or non-exempt entities have to keep their books of account for at least 5 years. The company’s VAT-compliant bookkeeping & accounting records are used as evidence during the FTA audits. BestaxCA is a team of certified tax experts in Dubai who help national and international clients in the best manner. We proficiently handle your accounting records and financial transactions as per VAT laws. On this page, we will discuss VAT accounting in the UAE in detail.

What Is VAT Accounting & Bookkeeping?

VAT accounting is the most critical aspect of tax compliance in the United Arab Emirates. VAT accounting & bookkeeping consists of financial records, and their proper documentation related to value-added tax. It includes in-depth reporting about the tax calculation, VAT return filing, VAT collection, and payment in a specified time frame. The entity must choose the best accounting software in UAE that accurately generates balance sheets, ledgers, invoices, credit & debit notes, etc. Additionally, each company must keep a separate record of VAT charged and VAT paid on purchases.

Purpose of VAT Compliant Bookkeeping In UAE

An accurate and updated book of records is a requirement under UAE Tax Law for every taxable person. The primary purpose of this regulation is to make compliant all small or medium-sized companies operating in the United Arab Emirates. This proper implementation of VAT fairly distributes the tax amount among all businesses. The VAT-compliant bookkeeping records allow entities to file their VAT return or claim for VAT refund from the regulatory authorities. Furthermore, it will help during FTA investigations and keep you away from VAT non-compliance penalties.

Types Of Value Added Tax

The value-added tax has two different types in the United Arab Emirates. Let’s understand both of them below:

1. Input VAT

The input VAT is charged by a tax-registered individual or business. It is charged when goods are purchased or services are provided to the buyer. A registered entity can deduct the amount of tax from its settlement.

2. Output VAT

The output VAT is directly charged on the sale of goods or services rendered by the business. These transactions are automatically calculated and a comprehensive VAT report is generated by the advanced VAT accounting software in UAE.

Important Documents For VAT Accounting

A tax-registered business in UAE must prepare and maintain records of proper documentation. These records are inspected by the FTA auditors for tax assessment and VAT implementation. VAT Accounting in UAE requires the following documents to be submitted.

• Record of all goods and services supplied or imported
• All Tax Invoices & alternative documents
• Tax Credit & Debit Notes, received and issued
• Accounts of Goods and Services purchased and for which the Input Tax was not subtracted
• Record of exported Goods and Services
• Report on the due amount of tax after the adjustment
• General & VAT ledgers
• Purchase of Daybooks

Penalties For Failing To Keep Proper Records

Taxable persons who fail to keep a book of records under UAE Tax Law for at least 5 years have to abide by VAT penalties. The fine for not maintaining accounting records is AED 10,000 for the first time and AED 50,000 for repeated non-compliance. That is why all taxable persons must be VAT compliant for accounting and bookkeeping in the United Arab Emirates. Our VAT consultants in Dubai offer all types of VAT services as per FTA standards and do their best to avoid VAT fines and penalties.

Benefits Of VAT Complaint Bookkeeping

VAT-compliant bookkeeping and accounting records provide many advantages to individuals or businesses. The following are:

1. Ensure VAT Compliance

VAT-compliant bookkeeping records assure that the business is subsequently obeying the UAE tax procedure laws. It provides a checklist that VAT is accurately implemented on the incoming and outgoing tax, invoices, and debit & credit notes as FTA defines. The company’s books of account are the strongest evidence of your VAT compliance in the United Arab Emirates.

2. Make Tax Audit Easier

The VAT accounting reduces the burden of a tax audit by the Federal Tax Authority. Proper financial records help a lot during the FTA inspections of accounts. The VAT-compliant bookkeeping records assure the regulatory authorities that the business is already collecting and paying VAT. The management can obtain all the accurate details related to taxation by using this database.

3. Avoids VAT Penalties

VAT compliant bookkeeping and accounting records assure that the taxable entity is complying with all the UAE tax procedure laws. It verifies the company is abiding by regulations as set out by the relevant authorities of the United Arab Emirates. Proper tracking of financial transactions may reduce the risk of VAT administrative penalties by the government.

4. Boost Emirate’s Economy 

The value-added tax contributes to the country’s revenue which ultimately boosts the economy. This is only possible if the entity accurately calculates the tax on behalf of the government. The purpose of VAT accounting is to calculate and record the tax payments that a company will have to make to the government. Accurate implementation of VAT on accounts positively impacts the overall economy of the Emirate.

Why Choose Us For VAT Accounting Services?

BestaxCA is a licensed accounting and financial consultancy firm in Dubai, which provides exclusive VAT services to UAE residents as well as non-residents. Our group of experts assists you in the whole process of VAT compliance under the tax laws and regulations. By tailoring a cost-effective accounting solution for individuals and corporations, we gain our clients’ confidence. We are competent for VAT-compliant bookkeeping & accounting services in UAE. Our VAT consultants will focus on these areas while providing VAT accounting services in UAE. Such as:

• Value-added tax planning
• Reviews VAT-related records & transactions
• Update VAT records to avoid penalties
• Implement new VAT rules & regulations
• Register entity for VAT compliance
• Install accounting software
• Advisory on VAT return filing
• Prepare your balance sheet & ledgers
• Recommend VAT solution in the existing system
• Advice on VAT rates and calculations

If you still have doubts regarding our VAT compliant bookkeeping service. You are most welcome to get in touch with our tax experts in Dubai, United Arab Emirates.