The UAE government has taken steps to ensure that all taxable businesses are VAT compliant in accordance with the Tax Procedures Law. VAT was introduced as a new source of revenue collected by end-users on behalf of the regulatory authorities. This ultimately benefits society and the Emirati people. However, all this is possible if the taxpayer is capable enough to implement a proper VAT system in the UAE. It is a complex task to comply with VAT laws perfectly, but our team of tax experts in Dubai is here to take care of you and provide all VAT services under one roof with 100% satisfaction guaranteed.

What is Value Added Tax?

VAT is a value-added tax that was introduced in the United Arab Emirates and other GCC countries on 1 January 2018. VAT is collected at each stage of the supply chain. The standard rate is 5% for most goods and services, except exempt and zero-rated supplies under VAT laws. Let’s help you understand the whole process of VAT implementation in the UAE:

Why is VAT compulsory for businesses in the UAE?

In 2018, the UAE signed an agreement to introduce VAT on every taxable item. All individuals or companies are responsible for VAT compliance in accordance with the FTA standards. This includes VAT registration, filing VAT returns, VAT refunds and many other VAT activities. VAT implementation in the UAE is mandatory for all eligible taxpayers to prove that their records are VAT compliant. This may be seen as an additional cost for taxpayers, but non-compliance with VAT laws will result in severe penalties in the future.

Milestones for VAT implementation in the UAE

The UAE VAT law requires all business activities to comply with VAT implementation requirements. Each business must be sufficiently knowledgeable or can hire a team of VAT consultants in Dubai to develop a VAT implementation strategy. This is because it is a comprehensive procedure that requires tax expertise. Let’s take a look at the VAT implementation process in the UAE.

VAT applicable/exempt company

Our tax experts in Dubai first understand your business model, the types of goods and services you offer, and your company’s quarterly and annual turnover. This information helps them assess whether a tax group or individual entity is subject to VAT registration or is exempt from VAT. A key step for VAT compliance is VAT registration in the UAE. It depends on the revenue generated from taxable supplies and imports. If a company exceeds the threshold of AED 187 5000, it can register voluntarily. However, if the taxable unit exceeds the threshold of AED 375 000, it must apply for compulsory VAT registration. Our team also provides expert opinions and advice on the VAT registration process under the FTA. You can use our VAT consultants to take the first step towards VAT implementation in the UAE.

Overview of accounting and bookkeeping

For VAT implementation in the UAE, it is mandatory to keep VAT-compliant books and records. In order to develop an effective VAT implementation strategy for the company, the taxpayer must keep financial records that comply with UAE tax laws. The accounting records must be VAT-ready so that FTA auditors cannot impose VAT penalties and sanctions. Our team will ensure that your company’s records are up to date and accurate. We will check your invoices and credit, and debit notes to ensure correct tax collection. Our chartered accountants at Bestax CA will prepare your financial statements without hassle.

Tax assessment and calculation

A company registered in the United Arab Emirates must inform the authorities of the collection and payment of VAT. This can be done on a monthly or quarterly basis. For VAT implementation in the UAE, it is necessary to ensure that incoming and outgoing invoices are VAT compliant. Our tax advisors in Dubai will expertly check all your exempt/non-exempt supplies, input tax, and output tax, reconcile the transactions and submit the VAT return. Our error-free tax assessment and calculation will reduce the risk of penalties from the federal tax authority for VAT non-compliance.

Implement advanced VAT software

A business should determine whether its accounting software is ready to adapt to the new VAT system in the UAE. We will make sure that your IT system has the capability to comply with VAT requirements in day-to-day transactions. Our VAT consultants in Dubai will review your current accounting system to assess its suitability for the VAT laws. BestaxCA provides services for ERP implementation and VAT accounting software setup to suit your business needs. We guarantee that the recommended IT system will be configured in compliance with VAT regulations.

VAT training for employees

The implementation of VAT in the UAE requires that a company’s employees have knowledge of the latest VAT laws in the country. This is the biggest milestone in the implementation of VAT laws for a registered company. Employees must have the skills to prepare and record tax invoices, journals, and credit notes in accordance with FTA standards. For this reason, we provide employees with full guidance on VAT duties and responsibilities. Do our tax experts educate every department on how to comply with the rules at every stage of the supply chain? This detailed training will build partner confidence and protect you from VAT penalties.

The consequences of not including VAT

VAT registration and compliance are mandatory for all taxable businesses in any emirate in the UAE. All businesses should therefore check how they are currently implementing VAT in the UAE. VAT non-compliance by a taxable entity often manifests itself in the form of omissions, inaccuracy of information, unverified documents, inappropriate VAT software, poor quality accounting records, late filing, and many other VAT non-compliance issues. In such a situation, the federal tax authority may impose large penalties on the company. The situation is worse when the FNA carries out VAT audits and imposes penalties which are a burden for taxpayers. It is therefore advisable to outsource VAT implementation to experts in the UAE to avoid FTA penalties in the future.

Do you need a VAT implementation consultant in the UAE?

The implementation of VAT in the UAE is a substantial and long-term procedure that is complex for ordinary businessmen. It requires up-to-date knowledge of the authorities and expertise in VAT compliance. Bestax chartered accountants in Dubai have been helping businesses for years by providing exclusive VAT services. We specialize in VAT implementation and never disappoint our clients’ expectations. Our tax experts assess your invoices, logistics, and transactions in accordance with the UAE tax procedure law. We are dedicated to assisting you in all your VAT implementation procedures in the UAE. Contact us today and find out how our VAT consultants can help you!