All You Need To Know About VAT Services In Dubai

Value Added Tax (VAT) is one of the most general indirect tax types implemented in most countries. United Arab Emirates (UAE) has already implemented VAT efficient 1st January 2018. The value-added tax rates are 5 percent (standard rated) and 0 percent (zero-rated) at the moment. The VAT is an investment that practices to the use of all administrations and goods. 

Here we mention all you need to know about VAT services Dubai.

 

VAT is a kind of expenditure tax levied on the use/consumption of assets and services. VAT falls in the category of indirect taxes, and currently, it is employed in more than 180 countries across the globe. It is changed by business entities or people registered for VAT on account of supplies of goods/services to clients in the normal course of their business operations. VAT services in Dubai is levied at each stage in the supply chain. It is the end-consumer of the assets/services that sustain the VAT charge.

 

How To Register For VAT?

 

VAT registration Dubai refers to the set of the process by which a person can register with the Federal Tax Authority (FTA). Any person can apply for VAT registration or Excise Tax Registration in the UAE is they satisfy certain conditions.

 

Through its continuous planning and commitment, the Federal Tax Authority (FTA) has ensured that the procedures of VAT registration are quite minimal. The whole procedure of VAT registration is done online. A person who wants to avail of VAT registration shall create an e-services account in the FTA portal using their e-mail address. During the course of registration, several documents shall be submitted for verification of FTA, some of which are given below:

 

1. Company’s Certification of Incorporation
2. Company’s Memorandum and Articles of Associations
3. Power of Attorney
4. Copy of company’s Trade license
5. Copy of the authorized signatory’s passport
6. Copy of Emirates ID of the authorized signatory
7. Financial statements
8. Supporting documents relating to customs registration ( if applicable )

 

How is VAT collected?

 

VAT-registered businesses collect the amount on behalf of the government; consumers bear the VAT in the form of a 5 percent increase in the cost of taxable products and services they purchase in the United Arab Emirates. UAE imposes VAT on tax-registered businesses at a rate of 5 percent on a taxable supply of products or services at each supply chain step.

 

On Which Businesses Does VAT Apply

 

VAT applies equally to tax-registered businesses handled on the UAE mainland and in the free zones. But, if the UAE Cabinet defines specific free zones as a designated zone, they must be treated as outside the UAE for tax motives. The transfer of products amidst designated zones are tax-free.

 

Implications Of VAT

 

Implications of VAT on individuals:- VAT, as usual expenditure tax, will utilize to most transactions in products and services. A restricted number of privileges may be conferred.

 

Implications of VAT on businesses:- Business will be responsible for carefully documenting their business income, costs, and related VAT charges.