Apart from being concerned regarding the staff’s health and welfare, business owners in the UAE are worried about the impact of the coronavirus (COVID-19) pandemic on the health of their businesses. As there is a huge contraction with regards to available cash, it is expected for the majority of businesses to check their books and notice VAT. VAT is a large tax flow in a business in UAE. Fortunately, the Federal Tax Authority deferred payment of VAT and the submission of VAT return, which means there can be a positive impact seen onto the business from this announcement!
In order to ensure that fines and administrative penalties are avoided, businesses are clamoring into preparing for the monthly or quarterly submission of returns. Luckily for us, the authorities have delayed the VAT return filing in UAE. If you are running a business in the region and you are currently working from home, it’s recommended to assess the accuracy of the VAT returns to make sure that there is not a single mistake when it is time for the business to file.
If you did not receive any notification, then it is likely that you don’t know the FTA in UAE indicated that some registered businesses for VAT purposes can defer the return filing period and VAT payment as well. The changes include VAT return starting from the 1st of January up to the 31st of May to be filed at any time before the 28th of June. As for all upcoming filings, they will be made by the registered businesses quarterly (1st of June to 31st of August, 1st of September to 30th of November, and 1st of December and 28-29th of February.
Others may find themselves now required in doing three monthly returns instead of monthly. Others may also find no change to the obligations of their businesses in filing VAT returns. If you are not sure as to what you should do with regards to filing of VAT returns in light of the pandemic caused by a coronavirus, the authorities suggest to check particulars on the portal of the FTA and confirm information with regulated tax agents in Dubai or UAE.
The change offers businesses, most especially startups and small to medium-size businesses in the country, the time in making sure reporting is accurate and compliance is carried out with regards to obligations to authorities on VAT.
The nature of Value Added Tax is such wherein a large sum of money first passes through the hands of the registered business entity prior to it being paid to the FTA. By optimizing the flow of VAT through the business, you will be able to make a huge difference with regards to the cash flow of the business overall.
Of course, there are certain things that you should consider as a business owner and that includes the following:
If you will be or are in repayment position, then you should consider whether the current stagger of VAT return is appropriate as well as whether you’ll be able to move onto monthly returns; whether it is possible to submit or file VAT returns quickly; if there is a way for the business to efficiently manage FTAA’s process of getting tax return authorized. In such case, it is worth contacting a VAT specialist in advance in order to avoid errors and delays.
Other aspects to consider:
Of course, it’s crucial at this time for a business to consider the general efficiency of VAT. There’s a number of ways in which VAT can be more efficient with a perspective of cash flow:
Take note: potential cash flow opportunities from VAT can be unique, depending on the operations of the business as well as how the business has been structured. We know dealing with taxation matters in UAE can be hard, so call us here in VAT Registration UAE in order to clear your concerns regarding VAT. Call now!