Your Guide to VAT Obligations for Businesses in the UAE

 The year 2022 marks the fourth year since VAT was introduced in the country. The business in the UAE is supposed to comply with the VAT guidelines and we at VAT Registration UAE will provide you assistance in getting your VAT-related queries solved easily. This article is a quick guide to VAT obligations for businesses in the UAE. The business that is newly registered with Federal Tax Authority for VAT is supposed to meet a number of obligations in terms of tax. Failing to comply with the guidelines and rules will lead to a hefty fine that may lead to damage to reputation as well as loss of money.

Key Elements to VAT obligations for businesses in the UAE

Spread of VAT registration

The first thing that the businesses in UAE must do is to find out if they fall within the scope of VAT in the UAE or not. As per the latest updates, all the businesses must register for VAT if the total value of taxable supplies and imports exceeds the mandatory registration threshold of AED 375,000 over the last 12 months or if it is expected that the supplies and exports are going to exceed the mandatory threshold in the next 30 days. Also, a business can voluntarily opt for VAT registration in the UAE if the value of its taxable supplies and income has exceeded the threshold of AED 187,500 in the past 12 months or is expected to exceed the said threshold value in the next 30 days. In either of the cases, it is advisable to contact a tax consultant who can guide you regarding the procedure and rules in a better way.

Keeping the VAT records and documents

Businesses are supposed to maintain their tax records for at least five years. The period of record-keeping may differ from business to business in UAE depending upon their nature of business. The professional tax agents can help you in getting the mandatory requirements fulfilled when it comes to record-keeping and tax filings. The key records that are supposed to be maintained in the UAE are as follows:

  1. Company sullies and import of goods and services shall be recorded and maintained.
  2. Credit notes, tax invoices, or any other alternative document that the company receives.
  3. All records of the goods and services that have been disposed of by the company or which the company has not used directly for carrying out its operations, VAT amount paid on such kind of goods and services.
  4. Record of goods and service tax on which no input tax has been deducted
  5. Export records of the company
  6. All records of adjustments and corrections made on the accounts or tax invoices
  7. All records of adjustments and corrections made to the accounts or tax services.

Issuing tax invoice for all the goods and services that are taxable

The businesses that are required to make taxable supplies are supposed to issue an original tax invoice and deliver the same to the recipient of goods and services. the tax invoice must have mentioned the following data:

  1. At the top of the invoice “tax invoice” must be mentioned clearly.
  2. The name, address, and the Tax Registration number of the business shall be clearly mentioned.
  3. The name, address, and tax registration number of the receiver shall also be clearly mentioned.
  4. The serial number of the tax invoice or the tax identification number shall be also be mentioned. This helps in identifying the tax invoice and its number in any number of invoices.
  5. Supply date, in the case where it is different from the date of issue.
  6. Details of the goods.
  7. The unit price, size, and quantity of the supplies, payable VAT, and the amount payable.
  8. Any discounts rates that have been given.
  9. The total sum is payable in AED.
  10. Payable tax in AED with the exchange rate that is applicable at that time.
  11. If the recipient of the tax invoice wants to know the tax calculation, the same must be mentioned on the invoice.

Filing of the tax returns

In general, the FTA allows 3 months tax periods (also termed as quarterly tax returns) for the tax returns to be filed. However, the same may be shorter or longer in case it is felt that it is necessary by the FTA. Businesses in the UAE are required t file their VAT returns no later than 28 days from the end of each tax period. In cases where the original day for VAT returns falls on a weekend or a public holiday, the same is to be done on the following working day. UAE changed its working days from the start of 2022. One must assess the tax return filing dates according to the new working days’ rules. The VAT Registration UAE can help you in filing your returns without fail and on time.

Payable taxes must be settled on time

Businesses in UAE must settle their payable taxes on time. They must try making the payment before the due date to avoid any last moment hurry. Pushing the payment date may lead to unforeseen circumstances like the bank delaying the transfer of the due amount. VAT registration UAE can help you in avoiding delays in payment of VAT before the due date.

How can VAT registration in UAE help you in knowing the VAT obligations for businesses in the UAE?

The businesses in the UAE need to consult the right VAT consultants in Dubai who have full knowledge and experience in the field. At VAT registration UAE we ensure you that all sorts of queries and work related to VAT and tax returns of the businesses will be solved quickly. Get in touch with us today and we will be happy to help you in all sorts of procedures like VAT registration, VAT returns filing, issuing the tax invoices, and setting payable taxes. Avoiding all these activities can result in hefty penalties and hence we can be the best help for you in getting your VAT-related works simplified.

References

  1. https://www.tax.gov.ae/en/vat/guides-listing
  2. https://u.ae/en/information-and-services/finance-and-investment/taxation/valueaddedtaxvat

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