VAT Services

Excise Tax Consultancy

It is essential to understand the commitments and legal obligations you or your business might have to pay UAE excise tax.

If you need guidance and support on complying with excise taxes, talk to our team of experts. Just remember that it is your responsibility to meet these obligations.

In the UAE, the FTA has the power to conduct audits and impose penalties on those who are not compliant with their Excise Tax obligations. To avoid the fines, businesses must consult with tax experts before making any decision regarding the excise tax.

VAT Compliance in UAE

To help, Value Added Tax has been introduced in Dubai, and now, all UAE businesses must become VAT compliant. To clarify things and make them easy to understand, we put together a straightforward checklist for all the things you need to know about VAT. VAT compliance in the UAE checklist will help you in a variety of ways.

All businesses with a Dh 375,000+ annual turnover are required to register for VAT on or before the designated deadline. Failure to register before the deadline may result in a Dh 20,000 penalty. To complete this task, you may hire VAT consultants in Dubai.

So basically, in general, any business activities within the UAE will be charged with VAT and so the existence of VAT should be considered with every existing and new contract. And, if any business fails to take VAT into account in the prices of their goods, then their prices will automatically be considered inclusive of VAT.

According to the Value Added Tax law, companies must file returns in specific periods and before the end of 28 days.

The staff of every organization should know about all the particulars related to tax filing (whether small or big). This will enable them to keep better records and avoid any confusion in the end. The UAE government has released many guidelines and articles that touch on how to file taxes in the UAE and how to file a VAT in the UAE.

Finding a professional VAT consultant in Dubai is the most important thing for every company. With the help of a professional accountant, you can avoid mistakes when it comes to taxes and other types of filings. While these mistakes can cause some major trouble for you, it is best to try to be very careful about them.

It is important to have at least one member of your staff who has sound knowledge of VAT. This will ensure you are following all FTA guidelines. Although you train your entire staff regarding it, having a professional who knows hook and crook about the VAT will save you when an emergency arises.

What is VAT Registration?

The VAT Registration process is considered an important part of the organization as it enhances the business profile, averts penalties, and enables mass marketing. The tax registration number (TRN) will eventually be assigned to a business that has been registered for VAT.

Those taxable persons who reside in the UAE and whose value of annual supplies in the UAE exceeds or will exceed the mandatory registration threshold should apply for VAT in the UAE. Discrepancies will result in a penalty of up to 20,000 AED if performed by the organization.

VAT Registration in UAE

Registering for VAT means a business is recognized by the government, as a provider of goods and services, and has permission to charge VAT to customers and pay the proceeds to the government. For the following activities, only VAT-registered organizations will be permitted

Impose a Value Added Tax on the sales of taxable products and services.

Take input tax credit on VAT that was paid on their purchases, which will lower their taxable profit for sales tax.

It’s necessary to submit the VAT to the government.

Filing of periodic VAT returns

In addition to the above, all registered businesses must also establish a robust, organized business reporting structure that’s compliant with regulation in the form of accurate and updated books of accounts, tax invoices, credit notes, etc.

Therefore, understanding the fundamentals of VAT will be one of the significant steps for your VAT preparation and getting VAT registration will be the initial move towards transiting your businesses to the VAT era.

How is VAT collected?

Businesses that have collected VAT for the government will add 5% of the cost of the taxable goods and services purchased by consumers in the UAE. UAE’s VAT (value-added tax) is imposed on registered organizations of goods or services of all progression in the supply chain, from when they’re produced to when they’re consumed. VAT also applies to goods sold to tourists in the UAE, with one exception – goods intended for export are exempt.

VAT Consultancy  or On which businesses does VAT apply?

VAT is charged on tax-registered organizations that are located on the UAE mainland and in the free zones, but if the UAE Cabinet designates a free zone as a ‘designated zone’, it should be treated as outside of UAE for tax purposes. Transfers of goods between delegated zones are tax-free.

When are businesses required to file VAT return?

Taxable organizations must file VAT returns with FTA on a consistently and usually within 28 days of the end of the ‘tax period’ as defined for each kind of business. A ‘tax period’ is a particular period of time for which the payable tax shall be determined and paid. The standard tax period is:

Quarterly for organizations with an annual turnover below AED 150 million

Monthly for organizations with an annual turnover of AED 150 million or more

The FTA may, at its choice, allot a different tax period for particular kind of businesses. Failure to file a tax return within the predetermined time frame will make the violator obligated for fines according to the provisions of Cabinet Resolution No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

What is VAT Deregistration?

VAT de-registration is simply the procedure of terminating VAT registration. It implies de-activation of the registration and the VAT (Value Added Tax) number of the taxable person. VAT deregistration can be applied for by an individual registered under VAT or done by the Federal Tax Authority on finding that a person meets the conditions for de-registration.

Who must de-register for UAE VAT?

A business or an individual registered under VAT can only apply for VAT Deregistration in the following circumstances.

If the business or an individual stops making taxable supplies and doesn’t expect to make any taxable supplies over the next 12-month period, then they must apply for VAT Deregistration.

If the business or an individual is still making taxable supplies however the value in the preceding 12 calendar months is less than the Voluntary Registration Threshold (AED 187,500) then they should apply for VAT Deregistration.

If the business or a person is still making taxable supplies however the value in the past 12 months was less than the Mandatory Registration Threshold (AED 375,000) and 12 months have passed since the date of registration if you were registered voluntarily then you may apply for VAT De-Registration

VAT Deregistration Penalty

The consequence for neglecting to apply for a mandatory de-registration of VAT within the predefined timeframe i.e., within 20 business days, from the occurrence of the event causing the taxable organization to get qualified for tax deregistration, is AED 10,000.

How to Cancel Vat Registration In UAE?

At the point when an element satisfies the criteria to de register for VAT in UAE, the can do as such through signing into their VAT Account on FTA Portal. After login in, through VAT deregistration structure UAE you can provide the subtleties alongside the purpose behind the VAT deregistration. Some data will as of now be populated into structure from the earlier enlistment information. The choice of FTA to affirm the application for de registration of VAT depends upon the gave reason just as the freedom of all:

Outstanding Taxes against the element.

Returns being documented.

Any Administrative Penalties have been ponied up all required funds.

Late accommodation can be made yet the endorsement from Federal Tax Authority to de-register VAT will be on hold except if every one of the liabilities alongside the late accommodation punishment have been paid. Indeed, even with the legitimate reason, the endorsement from FTA will exhibit the status of the application as “pre-Approved” and may be seen as complete when all of these liabilities are cleared.

VAT Records Keeping

The Federal Tax Law of the UAE requires all businesses conducting VAT transactions in the country to register these transactions and file reports on them. By law, every onshore company in the country that is engaging in any kind of activity must keep accounts and commercial books. In the reports presented to the FTA, accurate and current information must be provided.

The law also requires that any legal entity (if it is a company required to register for VAT) must register by the established procedures.
All relevant documents and correspondence with partners and tax authorities must mention the Tax Registration Number (TRN) received as a result of the registration of the company.

All VAT payers are also required to fill out a special form within 20 days if there is a change in the data related to VAT reporting.

By the adopted standards, a UAE-based company must register as a VAT payer upon achieving a turnover of 375,000 dirhams. The company must still keep their financial records, even if they are not required to register, in case FTA decides to check whether they must register.

The company should keep these records for at least five years, in case of a tax check.

If the recipient of taxable goods does not receive the tax invoice, this tax invoice should be kept in the reports in case the recipient does not receive the goods.

The law mandates that real estate companies keep financial records for 15 years. (According to the regulations issued by the Federal Tax Authority (FTZ)).

When should you submit a Voluntary Disclosure Form?

Under the pertinent legal provisions, there are times when a Voluntary Disclosure Form should or could be used by taxpayers and submitted to the FTA. Generally, it should be in instances where a taxpayer becomes aware of an error or omission in a Tax Return, Tax Assessment, or Tax Refund application, as below:

If you are aware that your Tax Return was incorrect, so it determined the Payable Tax according to the Tax Law was less than it should have been, you need to submit a Voluntary Disclosure to correct the error.

Don’t worry, you are not required to make a Voluntary Disclosure if the difference between what you were meant to pay in tax and what you paid is less than AED 10,000 and you have already corrected it in the Tax Return for the current year.

If you realize that a Tax refund application that you submitted to the FTA is incorrect, and because of that, you calculated the refund amount to which you are entitled according to the Tax Law, to be more than it should have been, you must submit a Voluntary Disclosure to correct the error.

If you know for sure that a Tax Return submitted by you to the FTA or a Tax Assessment sent to you by the FTA contains an error and caused you to owe more than you would under the law, you can use a Voluntary Disclosure to fix the problem.

If you’re aware that an incorrect Tax refund application resulted in a refund of a lesser amount than you should have been granted, you may file a Voluntary Disclosure to make corrections.

VAT Audit

Federal Tax Authority (FTA) representatives will conduct a tax audit in UAE to assess VAT compliance and to ensure the tax liability is correctly determined and paid. Businesses need to prepare for the FTA’s tax audit.

By conducting a VAT audit, the government can verify whether the taxpayer has followed all VAT laws and implemented VAT in line with FTA regulations. FTA will also be checking the VAT returns and VAT refunds submitted by the taxpayer. The VAT audit is meant to ensure that the business collects and submits VAT to the FTA within the assigned timeframe.

FTA will ask for hard copies and soft copies of all company financial records during the VAT audit. The audit will also involve reviewing and analyzing bank statements. Sales and purchase invoices, as well as books of accounts and VAT returns submitted to the FTA, will be reviewed by the FTA.

Excise Tax Registration in UAE

A company must be registered with the excise tax in the UAE if it imports, produces, or stores excise goods or release them from a designated zone in the UAE. Our Dubai excise tax services are the best in the business.

A business is liable for excise tax if it engages in any of the following activities:

• The import of excise goods into the UAE.
• The production of excise goods where they are released for consumption in the UAE.
• The stockpiling of excise goods in the UAE in certain cases.
• The release of excise goods from a designated zone.

A requirement for Excise Tax Registration

There is no registration threshold for excise tax, therefore any person who is involved in any of the activities listed below must register an account for excise tax.

Activities requiring Excise Tax Registration.

Activities requiring Excise Tax Registration

Any business which releases excise goods from a designated zone, imports, produces, or stockpiles excise goods in the UAE, should register for excise tax in UAE.

Excise tax in UAE has been applied on the following goods:

• Tobacco products
• Energy drinks
• Carbonated drinks (excluding sparkling water)