With (VAT) Value Added Tax’s introduction in UAE on the 1st of January, 2018, UAE has become one of the first countries to implement the…
Why Choose Us?
Value Added Tax (VAT) is charged on the purchase/sale of taxable goods and services in UAE. The current standard rate of VAT in the country is five percent. A VAT-registered business collects VAT on behalf of UAE Federal Tax Authority (FTA), and in doing so, it is entitled to claim VAT paid on expenses incurred on products/services for the business.
VAT Return Filing
At Farahat & Co., we also provide the assurance that net VAT positions of taxable business entities are accurate and within bounds of UAE law. A business in the UAE is given a maximum of twenty-eight (28) days for filing VAT returns by the end of a tax period. This limited time makes it incredibly difficult for the submission of accurate records, especially for enterprises and corporations dealing with a massive volume of transactions. The same is true for VAT groups as well.
VAT Accounting is relatively new to businesses in UAE as VAT has only been implemented recently. A VAT-registered business in UAE that fails in keeping and submitting VAT records will be imposed with a fine of Dhs 10,000. Repeated offense will have a penalty of Dhs 50,000. Our tax agents in UAE provide VAT Accounting so businesses are immune to tax violations and penalties. We provide bookkeeping assistance as part of VAT Accounting.
VAT return filing is necessary for all VAT-registered businesses in UAE, and they are to furnish details on input VAT and output VAT throughout a tax period. Output VAT is collected on sales whereas input VAT is paid to a supplier of a business. If the output VAT is higher compared to the input VAT, then the balance would be payable by the VAT-registered business to the Federal Tax Authority.
VAT Deregistration or Cancellation
VAT deregistration is mandatory as per UAE VAT legislation when taxable businesses no longer exist or deal with taxable supplies. Deregistration of VAT in UAE involves VAT registration deactivation and cancellation of a business’ tax registration number (TRN). As soon as a company ceases trading, the FTA may cancel the VAT registration if it is satisfied with the provided reason(s).
Regulated Tax Agent Services
Appointing Farahat & Co. as your regulated tax agent allows you to receive updates on latest changes in law provisions, eliminating possibilities of fines and penalties from noncompliance. As a taxable person, you require help in tax planning and compliance. Our VAT experts won’t just maintain accounts records and financial documents for you, but also provide representation on your behalf for VAT registration and return filing.
VAT Registration UAE
VAT (Value Added Tax) is an indirect tax initially with a very nominal rate i.e. 5%, applicable for most of the goods and businesses. Though UAE government has exempted food items, education and healthcare services from VAT but people can notice a little rise in their cost of living. However, it needs to be considered that VAT will not strain the wallets much but allows the high living standards not only to remain high but improving.
To comply with VAT and related legal requirements businesses need to make changes in their existing processes. Companies have to ensure that their accounts or records are well managed according to the new VAT regulations implemented by the government effective from 1st Jan 2018.
If a business in UAE exceeding AED 375,000 with the supplies and imports of goods/services subject to tax then it must register for VAT as per the Federal Tax Authority. As per FTA, all businesses must ensure the recording of their financial transactions, apart from that VAT registration requirements have done and ledgers are updated in time to avoid penalties.
To complete the registration, the service is available 24/7 through the FTA’s website. Businesses should visit the website www.tax.gov.ae, select the e-Services portal, sign up, and create an account. After the email verification, one can log in and register the business.
The FTA has advised businesses to provide precise information and fill up the application form accurately. Scanned documents including the trade/business license, passport/Emirates ID of the Manager/Owner of the business must be attached to complete the registration process.
The passport/Emirates ID of the authorized signatory must be submitted if the signatory is not the manager him/herself along with the proof of authorization including articles of association, power of attorney attested by notary etc.
There are a couple of documents required that come with registering with the VAT in UAE. The nature of the organization matters in registration.
For a businessman applying for a VAT certificate as an individual, the following are needed:
- Applicant’s request letter with signature
- Applicant’s resident permit
- Applicant’s passport copy
For businessmen registering as an authority, the requirements are as follows:
- Decree copy
- Application letter with authorized signatory
- Act of incorporation copy
The requirements for a Dubai-based business registering for VAT are as follows:
- Applicant’s application letter signed by the company’s authorities
- Trading license copy
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