Insights on VAT Administrative Exceptions in UAE

The recent guidelines on UAE VAT Administrative Exceptions indicate that the economic scenario is changing from time to time, complying with VAT rules. You may face some complexities and challenges to get fully compliant with VAT law. These challenges can be related with sorting of tax invoices of the supply within fourteen days of date provided and within the format prescribed by FTA. The minor errors in documentation cause vital consequences based on the circumstances such as interest, penalties and/or prosecution. The best choice is to choose the assistance of Tax Agents, to make sure co-operation and regularizing matters with a read to mitigate risk. FTA has recently turned up with the updated user guide for VAT exceptions type that shall profit not solely the small firms however conjointly a number of the larger businesses experiencing difficulties in compliance of VAT procedures. VAT body Exceptions give registrants concessions /exceptions by the Federal Decree-Law No. eight of 2017 on price. 

Also read, Why VAT Consultancy Services required for your business in UAE?

The businesses registered with the FTA can request exceptions by emailing the filled electronic application form to the website to specialexceptions@tax.gov.ae, the limitations are on the following matters:

• Tax Invoice and Tax credit notes: The tax registrant is expected to provide records which are available any supply. It is necessary to display the VAT rate and VAT amount along with the foreign exchange conversion rate in case of foreign transactions.
• Duration of the Tax Period:  sometimes the registrants are allowed to change the length of the Tax Period as the business may have ample time to receive the consideration to submit the Tax Returns. 

The following registered persons shall be able to take the profit below body Exceptions upon acceptance of the explanations by the FTA

1. Individuals: Board members, property owners, and other individuals like freelancers who issues the following in preceding 12 months:

• The number of invoices
• The taxable supplies
• The total tax paid

2. Businesses in refund position: Businesses that were during a refund position altogether the Tax Periods within the preceding twelve months, and expect to stay within the same position. 

3. Small and medium enterprises (SME) can get tax payment length on providing the details of total tax paid within the preceding twelve months and therefore the non-exempt provides within the preceding twelve months. Factors considered for determining tax period length (with preceding 12 months):

• Total tax paid 
• Taxable supplies
• Penalties of the registrants 

4. Stagger: Businesses have usually complained that tax periods do not align with the monetary year-end for them. This body exception shall enable businesses to align their Tax Periods with their twelvemonth finish thereby reducing the burden on the groups managing VAT.

5. Extension time for the export of goods: The individual should give the actual reasons for the extension of your time for the export of products. sometimes it’s beyond the control of the supplier.

EVIDENCE TO PROVE EXPORT OF GOODS

Failure to maintain those export evidence causes the following:

1. Export Sale subject to VAT at 5%

2. VAT would become cost

3. Administrative penalties

Example: In case of an exporter

The following is the best example for VAT return filing on the loss of any evidence by an exporter. The cases where proper documentation is not available concerning customs-exit documents:

• Shipment via courier agents
• Shipments included as part of bulk shipments in containers by logistic agents
• Land transport via vehicles

A taxable person engaged in exporting goods out of UAE through above means can now request an exception from the Federal Tax Authority seeking approval of an alternate form of evidence for export of goods.

Why choose CDA?

CDA team includes experienced chartered accountants as their tax advisers who have relevant industry-specific experience in taxation complying with UAE Laws to meet their VAT filing requirements. We are committed to providing the best VAT consultancy Services in Dubai to the clients in compliance with the rules and regulations of the FTA. By availing CDA VAT consultancy services in Dubai, you're getting access to the simplest possible means to fix the VAT structure that facilitates the whole VAT processes including VAT registration, VAT record keeping and maintenance, VAT return filing, VAT accounting, VAT deregistration and everything related to the Value-added tax in UAE. 

You may also read, Guideline to VAT Recovery on Expenses in Dubai

CDA offers a wide range of services that include CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software Consultancy Services, Due Diligence Services, VAT Return Filing & VAT Consultancy services. If you have any queries regarding your firm’s VAT related issues or about your current business, feel good to contact us.

Hope you got some insights on the VAT administrative expectations in UAE. Contact CDA for high standard VAT services in UAE.