VAT Services: What all you need to know

The Value Added Tax (VAT) service provider companies in UAE are not limited to just filing of VAT. They offer a holistic service that includes helping in VAT registration, VAT return filing, VAT return audit, VAT compliance and other associated services. You need to rely on an experienced VAT professional company that offers all the allied services.

What is VAT?

VAT is the tax on the consumption or use of the goods and services, levied at each point of sale. VAT is an indirect tax and is collected in over 180 countries across the world. It’s the end-consumer that bears the cost. In UAE, VAT was introduced on January 1, 2018 and the rate is 5%. VAT is the new source of income for the federal government. Federal Tax Authority (FTA) is the parent body, collecting and managing federal taxes. FTA works towards bringing financial stability in the country. VAT ultimately helps the Government move towards its vision of reducing more dependence on oil and other hydrocarbons.       

VAT Registration

If you’re running a business in UAE, the importance of VAT registration cannot be just ignored. If you’re a business owner or planning to start a business in UAE, you require to get registered under the VAT laws. To initiate VAT registration process, you can fill the online form and submit it with the essential documents. The entire process takes place on an online platform. Once you submit the application, FTA will review the information and finding them valid, approve the application. Following its approval, the government will issue a Tax Registration Number (TRN).     

VAT Return Filing

FTA allows VAT filing through its online portal. The facility is available under e-service section of the portal. A taxable person needs to fill form VAT 201, within 28 days from the end of each tax period, prescribed by the authorized agency. The filing and the submission of the form must be strictly in accordance with the laid down UAE VAT laws. The taxable person is also liable to remit the amount of tax, within the time frame. VAT returns can also be filed after accessing the online form. The filed VAT return essentially discloses the due tax amount, or the refundable amount, whatever the case may be.

VAT Compliance

According to the laid down rules, if your company meets the minimum turnover criteria, then you must get registered for VAT. All such companies will be offered Tax Payer registration number that would be unique for individuals. If your company’s annual revenue is 3.7 million Dirham then it’s taxable, and registration is mandatory. VAT laws offer registration options for another category companies,  having annual revenue anywhere between 1.87-3.75  million Dirham. Each and every company needs to maintain proper financial records in UAE. It’s the company management’s responsibility to ensure that the offered records are updated, reliable and importantly, accurate. These financial records are considered as evidences that help to identify if the company meets the minimum annual criteria and whether it is required to be registered under the VAT laws.

VAT Return Audit

VAT return audit is the formal examination carried by the FTA to verify information, submitted documents or uncover fraud or inaccurate tax returns. The department of Finance, UAE Government defines tax audit as a procedure undertaken by the legal authorities to inspect the commercial records or even any information pertaining to any person, conducting business . FTA may perform the tax audit at its own office or even at the place of business of the person concerned. It may also audit the records at the place where the person conducts business, keeps records or store goods. According to the tax laws, the auditor has the right to enter the business premises and can temporarily close the business in order to perform the audit for a period not exceeding 72 hours.

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