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Navigate VAT with Confidence: Expert Guidance on Compliance, Registration, and Efficient Management in the UAE.
Gulf Co-operation Council (GCC) countries have agreed ‘in principle’ to the GCC VAT Agreement to levy VAT (Value Added Tax) in the region. This will help the region to reduce their dependence on oil and other hydrocarbon products as a source of revenue. It is agreed by all the GCC countries that VAT will be introduced latest by 1st January 2019. However, UAE and KSA have decided to implement VAT w.e.f 1st January 2018. VAT registrations in UAE have begin from October 01, 2017.
VAT is one of the most common types of consumption tax found around the world. Over 180 countries around the world have implemented VAT. It includes the European Union (EU), UK, Canada, New Zealand, Australia, Singapore, Malaysia, India etc. USA, GCC countries and some other countries, especially from African continents, have not introduced VAT.
VAT is charged at each step of the ‘supply chain’. End consumers generally bear the VAT cost while registered businesses collect and account for the tax, in a way acting as a tax collector on behalf of the Federal Tax Authority.
Click on the link to view the updated List of UAE Designated Zones For the purposes of the Federal Decree-Law No. 8 of 2017 on Value Added Tax
1. VAT Registration:
Businesses with taxable supplies exceeding AED 375,000 annually must register for VAT with the Federal Tax Authority (FTA). Smaller businesses with taxable supplies between AED 187,500 and AED 375,000 can choose to register voluntarily.
2. VAT Rates:
3. VAT Compliance:
Businesses are required to issue VAT-compliant invoices, maintain accurate records, and file VAT returns quarterly or annually, depending on their taxable turnover. Non-compliance can result in penalties and fines from the FTA.
4. VAT Returns:
VAT returns must be filed electronically through the FTA’s online portal. Returns include details of VAT collected on sales and VAT paid on purchases. Proper documentation and timely submission are crucial for compliance.
5. VAT Refunds:
Businesses may be eligible to claim VAT refunds on certain expenses or exports. The process involves submitting a refund application to the FTA, supported by relevant documentation.
Implementing VAT requires businesses to adopt rigorous accounting practices and compliance measures. Understanding VAT regulations and managing VAT-related processes effectively can lead to significant cost savings and operational efficiencies. Accurate VAT management ensures that your business avoids penalties and benefits from available refunds.
At Wise Consultancy, we offer expert VAT services tailored to meet your business needs. Our team provides comprehensive support, including VAT registration, compliance, filing, and advisory services. We help you navigate the complexities of VAT, ensuring your business remains compliant and optimized for efficiency.
