Value Added Tax is an indirect tax imposed on the consumers on purchase of taxable goods and services. VAT registered businesses collect tax from consumers on behalf of the government. UAE introduced VAT in the year 2018.
VAT Registration
VAT registered businesses collect a tax of 5% from their customers and pay it towards the government. VAT registration is compulsory for businesses with taxable supplies and imports more than AED 375,000 a year. Businesses with taxable supplies and imports of AED 187,500 per annum can voluntarily register for VAT.
VAT registration can be done online at the Federal Tax Authority’s page with all the necessary documents. Taxable persons or the VAT registered businesses must file VAT returns to the government on a regular interval with the transaction details and other book of accounts.
Buchprufer Consultants LLP will aid you in every step of the VAT registration process;
- Assess whether an entity is required to apply for registration
- If VAT registration is required ,our experts will help you in the process of VAT registration and educate you about requirements for the same
- We will help you review the necessary documents required for the process
- Uploading the documents in the FTA’s portal
- Regular tracking and notifying you on the completion of the registration process
VAT Returns
The VAT returns must be submitted by the “taxable persons” or VAT registered businesses to the Federal Tax Authority (FTA). The VAT returns shows the VAT liability and the values of supplies and purchases made during the tax period by the taxable persons. The tax period varies for different types of businesses and the returns must be submitted within 28 days of the tax period. Failure to file VAT returns in the mentioned period will result in huge fines and penalties.
VAT returns can be submitted online at the portal of the FTA.
VAT return filing is a complex procedure and requires a lot of documentation, we at Buchprufer ensures to assist you in:
- Reviewing the sales register, purchase register, input and output VAT ledger during the tax period to accurately determine the tax amount.
- Reviewing the invoices randomly to ensure that the documents adhere to VAT laws and agree with the accounting records
- Reviewing the VAT calculation to check whether the tax rates are used, and the liabilities are calculated accurately
- Providing tax calculation template to the clients for a better understanding of the tax working
- Effective communication on the statutory compliance shortfalls and internal control weaknesses
- Filing tax returns to the respective authorities
VAT Refund
If output VAT is lesser than the input VAT amount, the excess balance will be VAT refundable. A formal refund request is required to be made through FTA portal for refund of tax amount.
Buchprufer Consultants will help you in the complete process of tax refunds beginning with:
- Preparation and reviewing of VAT refund application
- Reviewing the documents submitted for the VAT refund application
- Educating the clients with the working of the refund through an easy and understandable template
- Submitting the application for VAT refund
- Tracking and updating the status of refund application
VAT processes will be made easy when you sign up with Buchprufer. We aim to enlighten our clients on the processes of VAT and its computation. Buchprufer ensures to provide quality services to our clients at affordable prices. Our team of VAT experts will be at your service whenever necessary.
VAT Accounting
VAT being a form of indirect tax is not a cost to the company; the organizations only act as an intermediary and collect the taxes on goods and services from the customers and pay them to the government. The VAT paid during the time of purchase will be refunded to businesses by the government. As it is a transaction tax, VAT will have a major influence on businesses. Accounting of VAT is necessary as it could create confusion during VAT return submission or while creating financial statements.
Buchprufer, with our prowess in VAT and accounting will assist you in:
- Recording and reporting VAT
- Creating inventory masters
- Tax coding of transactions
- Prepare general ledgers
- Prepare master data of suppliers and customers
- Sales and purchase schemes of accounting entries
VAT Advisory Services
VAT transaction advisory services basically means guiding an entity about the specific industry transactions to check the applicability of VAT. If an entity has transactions with multiple products, services, multiple locations and branches, transaction advisory services come in handy. Our professionals at Buchprufer provide assistance in understanding the scope and effects of VAT in a business entity with their extensive knowledge of the government tax laws and regulations.
VAT Audit services
VAT audit services are conducted to analyze whether the organization is complying with the VAT laws and regulations. Our VAT audit services will help in the proper evaluation of VAT accounting and return filing. It will also help in identifying the major deficiencies in VAT recording and reporting. VAT audit services also helps in preventing double payments of VAT or the possibility of undercharging the consumers. Through audits, proper and accurate reports can be submitted to the Federal Tax Authority (FTA) as well.
Frequently Asked Questions
What is VAT?
Value Added Tax (or VAT) is an indirect tax applied on the consumption of most goods and services. It is also referred to as a type of general consumption tax. It is imposed on a product at each stage of production before the final sale.
At each stage in the supply chain, businesses collect VAT on behalf of the government. Because it is added to the customer’s purchase price, ultimately it is the end consumer who pays VAT.
What are the VAT rates?
Most goods and services carries 5% VAT. The rest of the supplies of goods or service are either exempt supply or zero-rated depending on meeting a certain condition.