VAT Consultants in Dubai
The UAE introduced VAT in the year 2018 at a standard rate of 5 percent. The move was seen as an initiative to reduce UAE’s dependence on oil and provide the country with a new source of income. Businesses initially found it difficult to comply with VAT regulations since the country was new to this form of tax. But the assistance of experienced VAT consultants in Dubai made VAT compliance a cakewalk. VAT consultants help businesses with efficient tax planning and guide them through the changes that must be done for the organization to become VAT compliant.
VAT in UAE
VAT is a form of tax charged on the consumption or use of goods and services. Businesses with taxable supplies and imports more than the mandatory registration threshold of AED 375,000 must register for VAT. In the case of businesses whose supplies and imports are less than the mandatory registration threshold, but are more than the voluntary registration threshold of AED 187,500, registration can be done voluntarily.
The tax collected by businesses is paid to the government and the government refunds businesses on the tax they have paid to suppliers. Foreign entities can apply for VAT refund on the VAT they paid while visiting UAE.
TAX registered businesses on the UAE mainland as well as free zones are liable to register for VAT. If UAE Cabinet provides a ‘designated zone’ status to a particular free zone, it will be excluded from VAT. Also, tax won’t be charged for transfer of goods between designated zones.
The role of VAT consultants in UAE
VAT consultants in UAE perform numerous tasks to ensure businesses are complaint with VAT rules and regulations. They include;
Reviewing the existing record maintenance and ensuring all the financial transactions are correctly recorded in alignment with UAE VAT rules and also confirming that the books of accounts are accurate and up to-date.
Implementing efficient strategies to determine the time of supply, identify the place of supply and differentiating various supplies into standard rate, zero rate, exempt or out of scope category. This is done taking into consideration the existing business models and transaction scenarios.
Reviewing the business processes that include pricing, procurement, invoicing, logistics etc. and ensuring they are in compliance with the VAT requirements.
Providing basic training on the fundamentals of VAT and its impact on businesses, which helps in building organizational competency.
An analysis of the current software for VAT compatibility and give suggestions on changes that must be made to it and cases wherein new software is required, recommend the same based on business requirements.
Inform vendors and customers about VAT and the impact on transactions that will arise from VAT implementation
Preparation &Transitioning to VAT regime
Assistance in filing VAT return
Providing a plan on implementing VAT
Advantages of hiring a VAT consultant in UAE
VAT compliance is quite a complicated process; proper monitoring and accurate recording in the books of accounts and reporting to FTA within the deadline are mandatory.
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