Vat consultants in Dubai
What Is a Value-Added Tax (Vat)?
The term value-added tax (VAT) refers to a consumption tax on goods and services levied at each stage of the supply chain where value is added. As such, a VAT is added from the initial production of goods and services to the point of sale. The amount of VAT the user pays is based on the cost of the product minus any costs of materials that were taxed at a previous stage. Value-added tax rates vary. Not all countries impose a VAT on goods and services, including the United States.
Value Added Tax (VAT) is an indirect tax imposed on the consumption of goods and services. Businesses in UAE need to register under the VAT law to get their business approved by the government, to seize a mass market, to expand business profile, and more. If you are a business owner looking for VAT consultancy services in UAE, AHG will help you avail various VAT related services including VAT registration, VAT deregistration, VAT accounting, VAT return filing, etc.
UAE VAT Consultants
The UAE has entered into the world of Taxes very recently. The government introduced Excise Tax with effect from 1st October 2017 and the Value Added Tax (VAT) from 1st January 2018. The applied rate of Excise tax for carbonated drinks is at 50% and for tobacco and energy drinks, it is 100%. At the same time, the VAT rate is applicable at a minimal rate of 5%.
Why you Need a VAT Consultant in UAE?
Why do you need a Vat Consultant in UAE? As Vat is a newly implemented idea in the region, it requires the advice of trained and skilled Tax professionals to support the businesses in complying with the laws in the initial stages of this evolution. Many companies are not aware of the need for Vat registration, and the rules and regulations of calculating VAT and the process of the payment.
The VAT Law in UAE
VAT, or Value Added Tax, is a type of tax that is imposed on the consumption or use of goods and services. The ultimate cost of the tax is borne by the end consumer. In the UAE, businesses that are registered for tax are subject to a 5% VAT on taxable goods or services at each stage of the supply chain. These businesses are responsible for collecting and accounting for the VAT on behalf of the government.
By Federal Decree-Law No. 8 of 2017 on VAT and Cabinet Decision on the executive regulations of Federal Decree-Law No. (8) of 2017 on VAT, business owners in the UAE are required to register their companies for VAT.
The VAT applies to tax-registered businesses operating in both the UAE mainland and free zones
Documents Required for VAT Registration in UAE
To apply for VAT registration in the UAE, businesses are required to submit the following documents:
- A copy of the trade license
- Passport copies of the business owner and partners
- Copies of the Emirates ID of the owner and partners
- Memorandum of Association (MOA) and Articles of Association (AOA) of the company
- Company contact details and address
- Bank account details
- Monthly income statement for the period from 2017 till the present, as per the FTA format
- Nature of business and activities performed
- Expected turnover for the next 30 days
- Customs registration details (if applicable)
- Emirates ID and passport copies of authorized signatories, along with authorization documents.
Penalties
Generally, fines and penalties in UAE are quite severe. As a business, you need to be sure you comply with FTA regulations to avoid unpleasant “surprises”.
All your Invoices should be done according to a certain standard. FTA penalty for each incorrect invoice is 5,000 AED.
However, you should be careful when registering with FTA, because not every business needs to be registered and pay VAT. In case you register incorrectly, financial penalties will be imposed on your company.
In case you liquidate your company, do not forget that you should deregister with FTA. Fine for late de-registration may reach 10,000 AED.
How and when can I do VAT de-registration?
VAT de-registration should be done in 2 cases:
- You closed the business
- Your sales are no longer VAT liable
If you closed the company, you should apply for VAT de-registration right away to avoid penalties for late de-registration.
In case your business model has changed and you are not supposed to pay VAT in UAE, it is better to take a qualified advice and then apply for de-registration. The process may take a few months since Federal Tax Authority will need to check if your business is really no longer VAT liable.
Since AHG ’s an Approved Tax Agency in the FTA of UAE and one of the leading Tax Agencies who is specialized in the Excise Tax, AHG’s Services range from Tax Registration, Tax Filing, Tax consultancy, Warehouse Keepers and Designated Zones Registration, Stock and Duty Calculation, Advice on Stockpilers, Tax Agent, Digital Tax Stamps Filing Disputes, Representation in front of the FTA of UAE