VALUE ADDED TAX IN UAE
Value Added Tax (or VAT) is an indirect tax. The UAE Minister of State for Financial Affairs, His Excellency Obaid Humaid Al Tayer in a joint press conference with Managing Director of IMF, International Monetary Fund, Mrs. Christine Lagarde announced that VAT will be introduced and implemented with effect from 1st January 2018 in UAE. The UAE Government also established The Federal Tax Authority (FTA) will be responsible for monitoring, regulating and maintaining records and data on taxpayers. It will also issue necessary guidelines and clarifications to taxpayers on matters related to federal taxes and related fines.
The FTA whose headquarters shall be in Abu Dhabi will be responsible for the collection and management of federal taxes. It will issue guidelines and directives to taxpayers on matters relating to the anticipated VAT and other taxes that may be imposed in the future. It has been assigned many related functions to Tax as fully provided in Article 4 of the Decree and combating Tax Evasion and Tax Avoidance, the FTA shall have the power to request access to any data and any third party available information relating to a person who is subject to tax audits.
VAT is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT (or its equivalent, Goods and Services Tax), including all 29 European Union (EU) members, Canada, New Zealand, Australia, Singapore and Malaysia. Recently Indian Subcontinent enacted law Goods and Services Tax (GST).
VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government.
WHAT YOU SHOULD KNOW ON VAT
Beginning of 2018, the UAE government will roll out Value Added Tax in the country and will be levied on businesses in order to motivate the local economy. The Ministry of Finance orders VAT to be implemented on transactions for various goods and services, as well as on the use of public infrastructure and services. The UAE will be involved in developing a legislative framework for the tax, along the Gulf Cooperation Council (GCC) member countries to warrant that the levy VAT and diversifies the local economy. Make sure your business is prepared for the economic impact of the legislation, with the help of our professional VAT consultant, for more details, contact us today.
HOW WE CAN HELP YOU AS TAX CONSULTANT
Basic requirements under VAT system the companies have to comply:
Filing the VAT returns to the Government authorities by providing the relevant information requested by the Government, within the stipulated period.
You have to maintain proper stock, sales invoices, purchase bills, accounts, VAT returns, and other relevant records to justify the tax paid at the time of purchase.
This mandate more control and safety on stock, invoices, bills and records, ensure proper filing system, modification, upgradations of software, compliance of due dates for collection, payment, and remittance of tax, filing of VAT returns to government in timely manner. Then the role of the accountant will be very important for the compliance of VAT. Maintenance of accounts and records is mandatory as per new UAE company law, otherwise, authorities will impose penalties and fines for non-compliance.
Please feel free to contact us for consultation, assistance and proposals;
WE OFFER FOLLOWING SERVICES
- VAT Accounting Services
- VAT Accounting Setup Services
- VAT registration Services
- VAT Return Filing Services
- VAT Compliance and Consultancy Services
- Tax Residency Domicile Certificate Services
- Service Tax Return Filing Services
- Tax Compliance Services