- 0509827955
- info@silveroakauditing.com
VAT Services in UAE
Home > VAT Services in UAE
VAT Services in UAE
The UAE introduced a value-added tax (VAT) on 1 January 2018, with a 5% rate on goods and services. Business operations require registering and consulting a VAT service provider to ensure compliance with Emirati laws.
Value-Added Tax for UAE Businesses
This policy aims to widen the economic scope of the country by integrating additional revenue from the oil crisis, reducing the government’s dependence on oil and hydrocarbons. Silver Oak auditing firm in the UAE provides various VAT services, including registration, deregistration, accounting, return filing, and advisory services. Proper services help businesses avoid unnecessary tax payments and maintain accurate VAT records, tracking up-to-date information regarding VAT filing.
What is VAT?
VAT is a government-imposed tax on goods and services used at each point of sale. It applies to tax-registered businesses in the UAE, both on the mainland and in free zones. A taxable supply is a delivery of goods or services made by a company in the UAE, which may be taxed at 5% or 0%.
Difference between Zero-rated & Exempted Tax supplies
Zero-rated supplies are goods and services that are taxed at a zero rate (0%), such as exports, first sales/rent of residential buildings, and specific educational services. These supplies can be recovered with input tax. On the other hand, exempted supplies do not levy VAT and are not required to register for VAT or claim input tax. Examples include financial services, residential buildings, and local passenger transport.
Relevance of VAT Services
Businesses can find relief in the face of new legislation by maintaining accurate accounting records for VAT return filing. Hiring a Silveroak auditing reliable VAT consultant can help streamline VAT processes in the UAE, reducing the burden on internal capabilities and resources. A competent VAT consultant can improve business performance, operational efficiency, and compliance, making VAT services crucial for companies to comply with new legislation.
How can VAT services help you grow your business in the UAE?
VAT services in UAE can help businesses grow by preventing errors in tax return filing, claiming input tax, avoiding fines and penalties, maintaining books of account for five years, conducting tax audits to prevent material misstatement, staying updated on VAT law changes, and providing guidelines for preparing sales invoices. By properly planning and managing tax collection, businesses can gain added value and cash inflows, ensuring they act as a mediator for the government.
Silver Oak auditing and Accounting Services Provided by VAT Consultants
VAT Consultants offer services in VAT compliance, risk identification, tax planning, filing, data recording, accounting, bookkeeping services in Dubai, business setup in dubai and organization for both purveyor and client organizations.
VAT Registration Process
VAT registration is required for businesses with taxable supplies and imports exceeding AED 375,000 annually. In contrast, voluntary registration is available for those with taxable products, supplies, and imports exceeding AED 187,500 per annum. Mandatory registration applies to businesses but not foreign organizations, and voluntary registration is available for companies.
How do you Register for VAT?
Businesses in the UAE can register for VAT through the FTA website’s online e-Services portal.
VAT Accounting
VAT Accounting Businesses are required to register and maintain proper records to file the VAT returns for the following transactions:
- Local Sales falling under standard VAT procedure
- Taxable Export Sales (GCC Sales)
- The VAT Exempted sales
- Local Purchases and Import Purchases
- Zero-rated Export Sales
- VAT Training
Organizations must understand the implications of new taxes and apply them to their business model with government reporting. Compliance requirements may involve changes in operations, accounting, technology, and human resources to comply fully with UAE VAT legislation.
VAT Impact Study
VAT implementation in the UAE has significantly improved transparency, responsibility, universal competitiveness, sophisticated ICT, improved functioning competence, and provided new financial support for socio-economic programs.
What is VAT Return Filing?
VAT Return Filing is a process where all VAT-registered organizations or taxable persons submit a VAT return to the Federal Tax Authority (FTA) at the end of each tax period, detailing the amount of VAT to be paid or reimbursed and highlighting the taxable person’s VAT liability, need to process for businesses to fulfill their tax responsibilities and maintain good standing with the FTA.
What is VAT Liability & How is it Calculated?
VAT liability is the difference between the output tax payable for a specified tax period and the input tax recoverable for the same tax period. It is calculated by considering a business’s total sales and purchases in the German return period, the VAT owed for sales, and the VAT able to be claimed for purchases. If output tax exceeds input tax, the difference must be paid to the FTA, while excess input tax can be recovered.
How to File VAT Return in UAE?
In UAE, businesses must file VAT returns electronically via the FTA portal ‘eservices.tax.gov.ae’ and fill out Form 201, which includes the taxable person’s particulars, the period of VAT return, VAT on expenses, sales, net VAT due, and additional reporting requirements.
VAT Return Form 201
Form 201 is a tax return statement required by taxpayers at the end of each tax period, detailing the taxable person’s particulars, the period of VAT return, VAT on expenses, sales, and net VAT due, and additional reporting requirements.
What are the Benefits of Filing a VAT Return?
Filing VAT returns offers numerous benefits, including goodwill, good business collaboration, highlighting the business picture, and being more accessible to administer than other indirect taxes, making it a popular choice for large companies.
When are businesses required to file VAT returns?
Businesses must be required to file VAT returns quarterly for companies with annual turnover below AED150 million and monthly for those with AED150 million or more, with the FTA having the discretion to allocate a different tax period.
VAT Assessment
Businesses are required to charge customers VAT based on their output and input taxes. Output tax is collected on selling goods or services, while input tax is paid on purchasing raw materials. The VAT assessment formula is VAT = Output Tax—Input Tax.
Silver Oak Auditing VAT Services
We offer top-notch VAT services in the UAE, including tax consultancy services, implementation and tax reclaim services, and accounting and bookkeeping services. Silver Oak is a leading platform for new start-ups and established businesses in Dubai and other regions of the UAE. We also provide accounting and bookkeeping services, accounting outsourcing services, internal auditing services, and more. Silveroakaditing VAT consultants are always available to assist businesses in complying with VAT rules and regulations, ensuring their goodwill and reputation are protected.
Faq
To register for VAT in the UAE, create an e-service account at https://eservices.tax.gov.ae, provide the required details, and click ‘Registration for VAT’ on the dashboard.
A registered taxable person issues a tax invoice, which can be simplified for supermarkets and retail industries or detailed for larger businesses.
A registered taxable person issues a tax invoice, which can be simplified for supermarkets and retail industries or detailed for larger businesses.
FTA reviews refund applications within 20 business days, notifying applicants via email of acceptance or rejection, and refunds are made within five business days once approved.
UAE Nationals can claim VAT refund schemes, even unregistered ones, for new residences constructed for owner and family use, subject to VAT law.
The import tax paid on goods is eligible for input tax recovery, which can be reclaimed through the Reverse Charge Mechanism.
Fuel expenses specifically for business purposes can be claimed.
Dubai’s VAT-exempt supplies include financial services, non-expensive fees, zero-rated residential buildings, bare land, and local passenger transport, as well as non-expensive fees, discounts, commissions, and rebates.
Businesses that provide exempted goods or services cannot claim input tax paid on purchases, as the tax paid is considered a company cost.