Federal Tax Authority in UAE
H.H Sheikh Khalifa bin Zayed Al Nahyan, the President of the UAE, established the Federal Tax Authority UAE under the Federal Law Decree No. 13 of 2016. It was formed with the mission to reduce dependence on oil as the major source of revenue, achieve economic diversification with best financial practices, and help the business community and consumers understand their tax responsibilities, thereby promoting economic growth and sustainability within the country.What is VAT Return in the UAE?
At the end of each tax period, VAT-registered businesses in the UAE must submit a VAT return to the Federal Tax Authority (FTA). This VAT return summarises the total value of the supplies and purchases made during that tax period and calculates the business’s VAT liability.
The VAT liability is determined by the difference between the output tax (VAT charged on sales of goods and services) and the input tax (VAT paid on purchases) for that period. If the output tax exceeds the input tax.
The business must pay the difference to the FTA. Conversely, if the input tax exceeds the output tax, the business will have excess input tax, which can be carried forward and set off against future VAT liabilities.
Comments