VAT Consultancy & Compliances

UAE is aiming to implement VAT w.e.f. 1st January, 2018 after having the GCC VAT framework signed earlier this year. The Federal Tax Authority (“FTA”) will be the newly created body that will be responsible for VAT and expected to also administer any other taxes as they are introduced.

As the implementation of VAT is nearing, business organizations should be ready to start preparing for VAT. VAT implementation in the business organization is not only management’s job. It requires involvement from the entire organization since non-compliance of VAT has very high consequences on the business. Hence, it is important that all the members of the organization should have thorough knowledge about VAT. Business organizations would face difficulties in implementing VAT because of lack of understanding of VAT laws & regulations, compliance issues, lack of competent staff, etc.

We would help business organizations in sharing our expertise and knowledge in smooth implementing of VAT in the organizations, analyzing the impact of VAT on the businesses, training management and employees about VAT laws, following & achieving VAT compliances, etc.

VAT Registration

  • Mandatory registration would be required to be taken if the taxable supplies exceeds AED 3,75,000 ( calculated over a 12 month period)
  • Voluntary registration threshold would be AED 187,500

How we can help you

  • Assistance in understanding the requirements which are mandatory for registration
  • Compilation of required documents
  • Online Filing of Registration form, uploading the required documents and obtaining Tax Registration Certificate
  • Replying to clarifications and submissions of additional documents if required by the VAT authorities.
  • Amendments in VAT Registration

VAT Return Filings

  • VAT Returns are completely online. No Manual submissions are allowed.
  • Periodicity for filing VAT returns shall be quarterly or monthly depending upon the turnover.
  • In case the return filing date falls on a public holiday or weekend, the deadline in that case shall be extended to following first working day.

How we can help you

  • Providing the Template file for maintaining the records required for filing VAT returns
  • Assistance in preparation of the said Template file
  • Verification of the said Template file before filing VAT returns
  • Payment of VAT before due dates
  • Filing of VAT Returns before due dates

Providing Knowledge and Training to Management &Staff

  • Penalty provisions are very stringent in VAT law.
  • Penalties are levied at 3 times the amount of tax in case of administrative penalties
  • Penalties are levied at 5 times the amount of tax evaded in case of tax evasion penalties.

How we can help you

  • Awareness of VAT concepts among management and staff/li>
  • Guidance to staff in passing VAT related Accounting entries in the books of accounts.
  • Maintenance of documents and records

Scope & Rate of Tax

  • Standard rate of tax @ 5% for both goods & services.
  • Exempt Supplies:
    • The supply of some financial services (clarified in VAT legislation)
    • Residential properties
    • Bare land and
    • Local passenger transport
  • Zero Rated Supplies:
    • Exports of goods and services to outside the GCC
    • International transportation, and related supplies
    • Supplies of certain sea, air and land means of transportation (such as aircrafts and ships)
    • Certain investment grade precious metals (e.g. gold, silver, of 99% purity)
    • Newly constructed residential properties, that are supplied for the first time within 3 years of their construction
    • Supply of certain education services, and supply of relevant goods and services;
    • Supply of certain Healthcare services and supply of relevant goods and services.

How we can help you

  • Guidance in determining the nature of supplies
  • Communicating the amendments in the tax rates and nature of the supplies, if any.

Invoicing under VAT

  • The words “Tax Invoice” should be clearly displayed on the invoice.
  • Name, address & Tax Registration number of both supplier & Receiver should be mentioned on the invoice
  • Date & Place of Supply
  • Description of goods or services supplied
  • Gross Amount, Tax Amount and Total amount payable expressed in AED
  • A simplifiedtax invoice can be issued in certain cases.
  • No tax invoice is required to be issued in certain cases

How we can help you

  • Guidance on preparation of Tax Invoices
  • Guidance in cases where Simplified Tax Invoices will be required to be issued
  • Guidance in cases where Tax Invoices will be not required to be issued

Assistance in Determination of Place of Supply

  • Place of supply would determine whether a supply is made with in the UAE or outside the UAE.
  • In case of supply of goods, as a general rule, the place of supply would be the location of goods where the supply takes place.
  • In case of supply of services, as a general rule, the place of supply would be where the supplier is established.

How we can help you

  • Providing guidance in determining the place of supply for supplies of goods & services falling under general rules.
  • Providing guidance in determining the place of supply for supplies of goods & services falling under special rules.

Assistance in Determination of Value of Supply

  • Value of Supply determines the taxable value of the supply and the amount of tax that has to be paid for it.
  • If the consideration for a supply is just in money,then the value of that supply is the amount of money received.
  • If the consideration is partially in Money, then the value will be determined as per the market value exclusive of VAT.

How we can help you

  • Providing guidance in determining the value of supply for supplies of goods made by the organization.
  • Providing guidance in determining the value of supply for supplies of Servicesprovided by the organization.

Assistance in Determination of Date of Supply

  • Date of supply determines under which VAT period the transaction falls under.
  • In case of services, the date of supply shall be the earliest of the following:
    • Date on which services are completed
    • Date of Receipt of Payment
    • Date of Issuance of Tax Invoice.
  • In case of continuous services over a period of several months or years, then the date of supply will be the earlier of:
    • Date of Receipt of Payment
    • Date of Issuance of Tax Invoice.
  • In case of Goods, the date of supply shall be the earliest of the following:
    • Date of removal/transfer of goods under the supervision of supplier
    • Date on which goods are made available to customer for possession
    • Date on which the assembly or installation of the Goods was completed where goods are supplied with assembly and installation.
    • Date on which goods are cleared by the customs authority in case of imports.
    • Date of Receipt of Payment
    • Date of Issuance of Tax Invoice

How we can help you

  • Providing guidance in determining the date of supply for supplies of goods made by the organization
  • Providing guidance in determining the date of supply for supplies of Services provided by the organization.

Claiming Input Tax

  • Input Tax means tax paid by a Person or due from him when Goods or Services are supplied to him, or when conducting an Import.
  • Input Tax can be reduced from the Output tax liability at the time of making VAT payments.
  • There are certain cases mentioned in the Act where Input Tax cannot be claimed.

How we can help you

  • Providing guidance in determining the value of Input Tax that can be claimed as per the provisions of the Act.
  • Providing knowledge on the cases where input tax cannot be claimed.

Tax Group Registration

  • Tax Group means two or more Persons registered with the Authority for Tax purposes as a single Taxable Person.
  • Conditions to be met for Tax Group Registration
    • Each shall have a place of establishment or fixed establishment in the State
    • The taxable persons should be Related Parties.
    • One or more persons conducting business in a partnership shall control the others.

How we can help you

  • Guidance in providing the benefits for availing Tax Group Registration
  • Obtaining Tax Group Registration.
  • Amendments in Tax Group Registration.

Other Services

How we can help you

  • Claiming Refunds from VAT authorities, wherever applicable
  • Availing benefits of Transitional Rules
  • Representations before VAT Authorities

Documents Required:

  • Trade License
  • Memorandum of Association/ Articles of Association
  • Passport and Emirates ID of Shareholders/li>
  • Passport and Emirates ID of Manager ( If Manager is different from Shareholders)
  • Description of Business Activity
  • Complete Office Address
  • Mobile and Landline Number
  • E-mail ID
  • Bank Account Details with IBAN
  • Last 12 months Business Turnover
  • Expected Turnover in 30 days
  • Customs Number, if any
  • Do you Intend to Import/Export goods or services
  • Proof of Authorization of Authorized Signatory

Time Involved:

  • VAT authorities generally take 10-12 days to issue VAT Registration Certificate.
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