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VAT Consultancy Related Services in UAE

VAT Consultancy Related Services in UAE

The Value Added Tax (VAT) is a relatively new addition to the list of taxes that businesses must pay. The main goal of its adoption was to make it easier to start and maintain a business in the United Arab Emirates, as well as to provide the government with a new stream of revenue that could be used for the welfare and development of the country’s citizens.

VAT is a mandatory consumption tax that applies to all goods and services in the country. Nearly 160 nations have adopted this notion into their domestic legislation, and the growing adoption of VAT has led to an increase in the number of VAT consultancies around the world. If your company hasn’t yet registered for VAT services, this is the first step you should take.

VAT in UAE

Every company in the country should understand how to file VAT returns in the UAE and how to collect VAT refunds after completing VAT returns in Abu Dhabi and the other Emirates. Recognizing this, the majority of GCC countries have recently agreed to impose VAT in the country. GCC countries such as Saudi Arabia, the United Arab Emirates, Bahrain, and Oman have all implemented VAT thus far. The government recognises your business if you are registered under the VAT statute. Certain categorization has been developed for the payment of AT for enterprises in the United Arab Emirates in order to make the process easier.

VAT in Dubai 2018

On a global scale, Dubai is regarded as the business capital. In the year 2018, the taxes structure in the entire country underwent major adjustments. The United Arab Emirates is renowned as a commercial hub because of its numerous benefits, including multiple trade-free zones, an easy-to-navigate business climate, and incentives for local enterprises. The introduction of VAT in Dubai marked a watershed moment in the city's taxation structure. Businesses are subject to a 5% VAT rate.

Keeping Track of VAT

VAT records are kept to make it easier for management and the government to track up-to-date information about VAT filing and avoid making excessive tax payments. Any company that is registered under the VAT Law is required to keep a book of records for a minimum of five years. The following are the book's main points:

  • Invoices for sales and purchases
  • Notes of debit and credit
  • Notes on import and export
  • Books of accountancy
  • Supplies and purchases that are tax-free
  • Goods issued solely for personal use

What is a Tax Registration Number (TRN) ?

TRN is a 15-digit number assigned to businesses who complete the application process and register under the VAT law. It serves as a unique identifier for VAT registration with the Federal Tax Administration (FTA). A business entity in Dubai or the rest of UAE has to go through the VAT registration process in the e-portal launched by FTA (www.tax.gov.ae). In order to obtain the TRN, the company has to submit the application along with the copy of essential documents like trade license, share certificates, MOA and AOA, Power of Attorney (if any), passport and Emirates ID of the shareholders and managers, customs registration documents, financial information such as revenue/turnover break-up for last 12 months, etc.

VAT's Economic Impact

Because VAT is an additional fee that must be paid, it has a number of implications for businesses. Let’s have a look at the areas where it has the largest impact:

Management is number one

The impact of VAT modifications or adoption on corporate structure will be significant, and dealing with customers and suppliers will be critical. This, in turn, will have an impact on the company's profitability as well as the country's economy.

Funding

On a financial level, the company will undoubtedly be harmed because it will have to deal with cash flow and effective cash allocation in order to reduce cash outflow. If the VAT services are not given adequate attention, the company may suffer significant losses in the future.

Execution

Before the VAT deployment, business processes and functions must be VAT-ready. This would help Abu Dhabi and other jurisdictions reduce the amount of errors and inaccuracies in VAT filing and VAT return filing.

Monetary policy

Both suppliers and customers have an impact on business relationships. It is critical that both parties adhere to the guidelines established by the relevant body in order to avoid future problems.

As a result, we can see the various effects of VAT on the various divisions of a commercial unit. Now, more than ever, it is critical to properly handle the VAT books in order to avoid future disasters. A VAT consultant is what you require at this critical juncture. A VAT consultant can assist you in determining the best strategy to create the VAT structure in order to simplify the VAT filing procedure.

Accroun Consultancy Services in UAE

Accroun understands the complexity of business, including accounting, taxation, and VAT services. Our experts will gain a thorough understanding of the business's operations and will tailor a solution for it.

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We will assign a dedicated and qualified team to your entity, who will assist you in ensuring statutory compliance and providing necessary management reports.

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