On January 1, 2018, the United Arab Emirates introduced a Value Added Tax (VAT) set at 5% across all goods and services. This tax is applied to the consumption and use of products and services at every point of sale. Businesses are required to collect and remit VAT, supporting the government’s ongoing development initiatives.
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The VAT registration process, whether voluntary or mandatory, follows the same procedure. Businesses can easily register through the tax authorities’ dedicated portal. However, it is crucial to ensure accuracy during the application process, as any discrepancies can lead to delays or rejection of the registration.
Mandatory VAT registration applies to businesses with an annual turnover exceeding AED 375,000. Voluntary VAT registration is available to businesses with taxable products or services earning between AED 187,500 and AED 375,000 annually. Businesses earning less than AED 187,500 are not required to register for VAT.
Given the complexities of the registration process, errors can result in significant fines or rejection. To avoid these challenges, many businesses prefer to outsource VAT registration to experts. With WeSetupBusiness, you gain access to experienced VAT specialists who can ensure a seamless process, saving you time and preventing costly mistakes.
Once registered, businesses must issue VAT invoices in accordance with the format set by the Federal Tax Authority (FTA). The Tax Registration Number (TRN) must be clearly displayed on all invoices. If the TRN is not included, customers are not obligated to pay VAT on the invoice.
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In the UAE, the threat of penalties is always looming over businesses, particularly for those who fail to comply with tax regulations—whether intentionally or unintentionally. However, there are strategies to mitigate this risk, and outsourcing complex tasks to experts is one effective solution. VAT calculations can be intricate, and failing to file VAT returns accurately or on time can lead to unavoidable fines.
VAT return filing is mandatory for all taxable businesses. Once registered for VAT, businesses must file their VAT returns and make the corresponding payments within 28 days after the end of their tax period. Failure to file on time or incorrect filings can result in substantial fines imposed by the Federal Tax Authority (FTA).
VAT return filing in UAE, can be a complex and burdensome process, with a higher risk of errors and non-compliance than many businesses realize. This underscores the importance of seeking expert assistance. To ensure accurate filing and full compliance, taxable entities must have an in-depth understanding of the tax period and other FTA requirements.
Not all businesses have an in-house team of finance specialists to handle VAT-related tasks, and VAT functions require more than just basic knowledge. This is where experienced business and management consultants, such as WeSetupBusiness, come in. We assist VAT registrants in the UAE by guiding them through the intricacies of VAT return filing, ensuring smooth and compliant operations.
Our team of professional accountants will take care of your bookkeeping and efficiently remove your burden of recording and updating your daily business transactions and performing bank reconciliation. According to UAE law, it is mandatory for all businesses to follow the rules and regulations set by the International Financing Reporting System (IFRS). Our bookkeeping services include data entry, recording and maintenance of daily transactions, accounts payable, receivable, etc.
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With the support of our qualified VAT compliance professionals, you can rest assured that all your VAT-related tasks, including VAT return filing, are handled efficiently and accurately.
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