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VAT Services in Dubai

The United Arab Emirates introduced a new form of indirect tax called Value Added Tax (VAT) on 1 January 2018 with a rate of 5 percent on goods & services. The VAT policy assumed by the GCC countries potentially widens the economic scope of the countries by integrating an additional source of revenue in the wake of the oil crisis. This new source of income will be utilised for high-quality public services by shifting to a more sustainable consumption system. It also aims to reduce the government’s dependence on oil and other hydrocarbons as a source of revenue.

What is VAT?

Value Added Tax or VAT is a tax on the expenditure or use of goods and services imposed at each point of sale. The bearers of the cost will eventually be the end-consumer. Organisations are obliged to collect and account for the tax in aid of the government. 

A taxable supply refers to a delivery of goods or services made by a company in the UAE that may be taxed at a rate of either 5% or 0%. 

Relevance of VAT consultancy services for your business in UAE.

Now businesses must have a fresh look at their business model. Proper continuance of accounting records will be one of the initial requirements for any business to endure the new legislation. Appropriate recording of all the invoices, outflows, etc. will be fundamental so that VAT return filing can be made timely without any errors.

At this juncture, outsourcing all accounting services will be the better option for the businesses that lack internal capabilities and sufficient resources to support VAT implementation. A competent VAT consultant improves your business performance, operational efficiency and VAT compliance.

Services provided by VAT Consultants

  • VAT compliance issues and control

  • Minimising VAT liabilities

  • Identifying risk and proper solutions

  • Identifying prospective tax planning opportunities 

  • VAT Filing and payment.

  • Data recording and organization.

  • Accounting & Bookkeeping.

  • Purveyor organization.

  • Client organization.

VAT Registration Process

Basically, a business can opt for any of the two types of VAT Registration process:

1. Mandatory Registration

The threshold for mandatory registration of a business is AED 375,000. But this threshold is not applicable to foreign organisations.

2. Voluntary Registration

The threshold for voluntary registration of a company is AED 187,500.

How to register for VAT?

Businesses can register for VAT through the e-Services portal on the FTA website. 

VAT Accounting

Businesses are required to maintain proper records to file the VAT returns for your following transactions:

a) Local Sales falling under normal VAT procedure, 

b) Taxable Export Sales (GCC Sales), 

c) The VAT Exempted sales,

d)  Local Purchases and Import Purchases. 

d) Zero-rated Export Sales.

VAT Training 

It is indispensable that organisations should try to understand the implications of the new taxes and make every endeavour to line up their business model to government reporting and compliance provisos. Businesses may need to make some changes to their mainstay operations, accounting and book-keeping, technology, and maybe even to their human resources to wholly abide by the UAE VAT legislation.

VAT Impact study

VAT implementation has brought some fundamental positive changes to the region that are discussed below. 

  • Amplified lucidity and responsibility,

  • Advanced universal competitiveness,

  • Organisations with sophisticated ICT,

  • Improved functioning competence,

  • New resource of financial support for socio-economic programmes.

What is VAT Return Filing? 

All the VAT registered organisations or the ‘taxable persons must submit a ‘VAT return’ at the end of each tax period to the Federal Tax Authority (FTA). VAT return filing declares how much VAT is to be paid by the taxpayer or reimbursed by the tax authorities. A VAT return recapitulates the assessment of the supplies and purchases a taxable person has made during the tax period, and shows the taxable person’s VAT liability. 

What is VAT Liability & How is it Calculated?

VAT Liability is the distinction between the output tax payable (VAT charged on supplies of goods and services) for a specified tax period and the input tax (VAT incurred on purchases) recoverable for the same tax period.

VAT Liability is calculated taking into account the following factors:

  • The entire sales and purchases of your business in the germane return period

  • The amount of VAT you owe for sales

  • The amount of VAT you are able to claim for the purchases made

If the output tax exceeds the input tax amount, the difference must be paid to the FTA. If the input tax exceeds the output tax, the taxable person will have the excess input tax recovered. He will be at liberty to set this off against subsequent payment owing to the FTA. 

How to file VAT return in UAE?

Businesses have to file for tax returns electronically through the FTA portal ‘eservices.tax.gov.ae’ and fill in the Form 201:-

  • Particulars of the taxable person

  • The period of VAT return

  • VAT on expenses and all other inputs

  • VAT on sales and all other outputs

  • Net VAT due

  • Added Reporting Requirements

  • Statement and Certified Signatory

VAT Return Form 201

The Form 201 is a statement that is required to be made by the taxpayer by the end of every tax period. It involves:-

  • Particulars of the taxable person

  • The Period of VAT Return

  • VAT on Expense and All Other Inputs

  • VAT on Sales and All Other Outputs

  • Net VAT Due

  • Added Reporting Requirements

  • Statement and Certified Signatory

What are the Benefits of Filing VAT Return?

  • VAT compliance brings goodwill to the business.

  • Good business collaboration.  In effect, many large companies are habitually indisposed to carry out business with non VAT-registered companies.

  • The business picture gets highlighted once registered under VAT law.

  • VAT is easier to administer when compared to any other indirect tax.

When are businesses required to file VAT return?

The standard tax period for VAT return is:-

  • Quarterly for businesses with an annual turnover below AED150 million

  • Monthly for businesses with an annual turnover of AED150 million or more.

  • The FTA may, at its discretion, allocate a different tax period for certain type of businesses.

VAT Assessment 

The businesses are liable to charge the tax to the customers based on the output and input tax. 

Output tax is the VAT collected on selling goods or providing services to the clients. Input tax is the VAT paid on purchasing raw materials for the goods or services.

Hence, the formula for VAT assessment is:

VAT = Output Tax – Input Tax

Why CDA Audit?

Ignorance is bliss, but it is a blunder in the case of VAT. Businesses that fail to comply with the rules and regulations of VAT may have to face serious penalties that may harm the goodwill of the business as well as the reputation of the businessman in the market. CDA provides top notch Tax Consultancy Services, and Implementation and Tax Reclaim Services at a very reasonable charge. CDA also provides Accounting & BookKeeping Services, Accounts Outsourcing Services, Internal Auditing Services and a lot more other services related to the business in the UAE.

Accounting services in Dubai

CDA is one of the leading accounting services in Dubai offering custom accounting solutions for your business. If you are looking for someone to manage your accounts but don't want to set up a full-fledged accounting department in your company, then accounting outsourcing in Dubai is the best option. CDA has been providing reliable accounting services to various businesses across Dubai.

We are equipped with expert accounting professionals who deliver the best solutions after analyzing your business operations and the type of solutions you need. This makes us your go-to accounting company in Dubai. At CDA, we commit ourselves to manage your finances in the most efficient manner possible. Being an accounting firm in Dubai we are well-versed in commercial company laws as well as federal laws in Dubai which makes us the perfect fit for the effortless management of your accounts.

When you entrust your accounts to us we manage your finances excellently while you enjoy the perks of outsourcing accounting services such as expert advice and guidance on accounting, easier problem solving and improved decision making.

Bookkeeping services in Dubai

CDA Accounting and BookKeeping Services LLC is your one-stop source for all your bookkeeping services in Dubai. Managing your books in a befitting manner calls for a professional bookkeeping service provider and the team of expert professionals at CDA with years of experience will provide the best bookkeeping services required for your business. For any business entity operating in Dubai proper maintenance of books of accounts is necessary to ensure the smooth functioning of the business.

Many small businesses cannot afford to have a fully functional accounts department or hire full-time employees for bookkeeping. This is where CDA proves itself capable of handling all your bookkeeping requirements. When you outsource bookkeeping activities, you save money as well as your precious time. At CDA, we provide professional and personalized bookkeeping services that are suited to the requirements of your business.

The years of experience and professional services rendered by our expert team makes us one of the best in Dubai bookkeeping services. If you find it difficult to manage the legal and technical aspects of bookkeeping then it's high time you outsource your bookkeeping services to the experienced members at CDA.

Audit firms in Dubai

When it comes to audit firms in Dubai, CDA is the best offering suitable solutions to your business after an in-depth analysis of the organization and finding the problem areas. Our seasoned professionals will check all areas of your business to find potential risks to your business operations and devise effective strategies to overcome the risks. Not managing the risks properly can lead your business to troubles and therefore it is absolutely necessary to hire the best audit firm to save your business the troubles.

CDA has been providing the best internal audit services in Dubai as we have the experience and expertise to manage internal audits seamlessly. We offer custom audit solutions depending upon the requirements and nature of your business. We conduct an internal audit of your organization with a risk-based approach. We not only analyze and audit your business operations but also suggest steps to improve risk management policies.

When you approach CDA for auditing in Dubai, we take care of all the legal and compliance matters so that you can focus on running your business efficiently rather than worrying about risks and risk management.