“While your VAT supports the nation, let us support you!”
VAT is a transaction-based indirect tax applied at each stage of the supply chain, with end consumers ultimately bearing the cost. Registered businesses, acting as tax collectors for the Federal Tax Authority, collect and account for VAT.
Introduced on January 1, 2018, by the Federal Tax Authority in the UAE, VAT requires businesses to adjust their core operations, financial management, bookkeeping, technology, and possibly their human resources to ensure compliance.
VAT is paid by the business to the government after deducting the tax paid to suppliers from the tax collected from customers. We offer a range of services to assist with VAT compliance, as outlined below
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VAT registration is required for individuals or entities operating a business. This can include individuals, legal persons, or other forms of entities. The criteria for mandatory VAT registration are as follows:
An inaccurate or incomplete VAT registration process can result in delayed approval of your Tax Registration Number, potentially leading to penalties. STH excels at offering a seamless registration service that covers all VAT requirements, ensuring you can proceed without any issues.
A VAT return is an official tax report that registered businesses must submit to the Federal Tax Authority (FTA). In the UAE, all registered organizations are required to periodically file their VAT Form 201 according to their tax period, regardless of their business processes or functions. Consolidating all taxable supplies, including exports, can be a challenging task. BCL Globiz has the expertise to ensure your VAT return is filed accurately and in full compliance with the law.
Additionally, any delay in remitting VAT liability past the due date may result in a late payment fee as outlined below
Last-minute VAT processing can lead to increased error rates and reduced capacity for corrective actions, resulting in additional time, energy, and financial costs. To avoid such risks, we emphasize regular computation of tax charges for better planning and ongoing monitoring, auditing, and calculation of VAT health and liability to ensure you stay in a secure position.
At STH, we keep our team up-to-date with the latest changes in VAT laws and offer exceptional professional advisory services. This proactive approach helps organizations avoid penalties and ensures long-term benefits.
Organizations request a VAT refund from the FTA when the input tax (paid on purchases) exceeds the output tax (charged on sales) in their VAT return filing. The FTA performs an initial assessment, verifies documents, and examines the claim. If the claim is validated successfully, the applicant is eligible to receive the excess tax refund within 20 days of the application.
The Federal Tax Authority’s web portal (EMARA Tax) facilitates online VAT registration in the UAE for obtaining the Tax Registration Number (TRN). BCL Globiz provides services for both VAT registration services and Tax Group registration services. A company is required to seek VAT registration when its taxable supplies or imports exceed the mandatory registration threshold of AED 375,000. Additionally, a business has the option to register for VAT voluntarily if the combined value of its taxable supplies, imports, or taxable expenses exceeds the voluntary registration threshold of AED 187,500
VAT, as a general consumption tax, is applied at 5% to all transactions of goods and services unless specifically exempt in Article 46 of the Federal Decree-Law No. (8) of 2017 on Value Added Tax or subject to a rate of 0% as per Article 45 of the Federal Decree-Law.
Every seller registered for VAT is required to issue a tax invoice when selling taxable goods or services. There are two types of tax invoice under the VAT decree, one is Simplified tax invoice and the other is full tax invoice. A simplified tax invoice can be raised by a seller if the recipient of services/goods is unregistered (B2C) or the consideration for the supply doesn’t exceed AED 10,000. A detailed invoice needs to have all the information as menitoned in the Article 59 of the Executive regulation.
The standard tax periods for VAT return are as follows:)
Common challenges faced during the VAT registration process in Dubai include incomplete documentation, difficulties in navigating the online application system, and understanding specific requirements. The FTA is very specific and if the required details are not shared then it can be rejected after issuing queries. BCL Globiz can assist in overcoming these challenges by providing professional guidance, ensuring accurate documentation, and facilitating a smooth VAT registration process.
Contact us today to schedule a consultation and learn how our corporate tax services can benefit your business.
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