Companies are to file their accurate VAT returns in the UAE Federal Tax Authority (FTA), and this can be done with the help of an accountant or Dubai regulated tax agent. It is recommended to seek the assistance of tax professionals in UAE as submitting erroneous information to the local tax authority can result in a hefty fine or trigger an audit.
In this article, we’ll provide you with a comprehensive guide on stay ahead of deadlines for VAT return filings in UAE. Let’s start!
All taxable entities in UAE for the purpose of VAT are to keep accurate records for six years. Gather the records and make sure that they are readable and meticulous. The best thing you’ll be able to do in order to protect your business, especially during surprise tax audits, is to accurately record all VAT-related transactions.
- Start making estimated tax payments; otherwise, your business may be subjected to fines and penalties.
- Separate the bank account of your business from your personal account. The same principle will apply to freelancers with home offices, which need to be separate spaces utilized solely for business.
- Digitize receipts or have a tax professional import receipts into a spreadsheet.
- Retain detailed notes. Make sure you log all car, travel, and any other expenses as they’re occurring.
Hire Tax Agent
The deadline for VAT return filing isn’t the best time to hire a tax professional. Make sure you prepare months in advance, so you can choose the regulated tax agent in Dubai you hire. Hiring a VAT advisor or expert can save your business a significant amount in the long haul.
Take note: tax preparation costs are tax-deductible in UAE.
Understand Qualified Credits and Deductions
Tax credits and deductions are crucial parts of a VAT return filing process. Taking advantage of tax deductions, especially for small businesses, will reduce taxable income. Take advantage of tax credits as well as can reduce the total amount due to the tax authority.
There are several tax credits that are available. This includes biodiesel use and offering certain services to employees like childcare. Check with a regulated tax agent in Dubai or a tax preparer of your choosing so you will not miss out on potential tax credits and deductions.
Familiarize VAT Return Regulations in UAE
It’s important for a business to understand the basic points of VAT return filing in UAE as the process has a direct impact on the business operations. As you’d expect, there’s a set of regulations that surround VAT in the UAE. It is also very easy for businesses to get confused. It is a great idea to be familiar with the UAE VAT regulations with the aid of tax professionals. However, to give you a general idea of what you should know about, the essential information you need include:
- There is not just a single VAT rate that is to be applied to goods or services offered by a registered business for VAT. The current rates for VAT are zero rates, VAT exempt, and a standard rate of five percent for taxable supplies.
- VAT can’t be reclaimed on everything; therefore, it is important to be careful on what to include as deductible in your VAT return. A business can’t reclaim the VAT that is paid for purchases that are not intended to be utilized by the business. If you are not sure whether something is qualified to be tax deductible, consult with your tax preparer.
- There are penalties for undeclared errors. The repercussions or consequences for not filing your VAT return in accordance with UAE regulations on VAT can be costly. Avoid making mistakes by allowing a tax professional to handle your VAT return filing.
Should I Hire a Regulated Tax Agent in UAE for VAT Return Filing?
Using the expertise and experience of a regulated tax agent in the UAE to help you file your VAT returns correctly can help prevent your business from making costly mistakes. A tax professional can also help in determining how much your business has to pay in advance so you are not faced with massive tax bills during tax season.
If you have not filed the necessary VAT returns in the past years, then you most definitely need to reach out to tax professionals in UAE. At VAT Registration UAE, our team of seasoned regulated tax agents based in UAE can help you in filing your tax returns while guiding you to solutions that are most suitable, depending on your financial situation.
It’s important to remember that tax regulations and guidelines in UAE for businesses change frequently. Our experienced professionals can be trusted in keeping you updated on all requirements applicable to your business. To know more about VAT return filing, call us today!