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About Vat in UAE

Value Added Tax (VAT) is now a reality. All organizations in UAE need to support up to this: proper tracking, recording, and reporting of your business transactions is an absolute necessity now and not a choice. UAE is executing VAT in front of other GCC nations and soon it would be applicable across the region.

VAT came into force on 1 January 2018 and its rate has been settled at 5 percent. If your business has taxable supplies and imports surpassing AED 375,000 per annum, registration is mandatory.

Even if your business hasn’t passed that limit, you can still choose to be part of VAT system if the supplies and imports surpass AED 187,500 for each annum. The VAT Executive Regulations are being endorsed.

Possible obstacles:

  • Lack of understanding of VAT rules and regulations.
  • Compliance issues
  • Lack of resources (Availability of specialists)
  • Improper bookkeeping system

General Principles of VAT:

Input VAT:
Input VAT is the VAT added to the price when goods are obtained or services are rendered. On the off chance that the purchaser is registered in the VAT Register, the buyer can deduct the amount of VAT paid from his/her settlement with the tax specialists.

Output VAT:
Output VAT is the VAT calculated and charged on the sales of goods and services.

Exempt Supply:
An exempt supply is a supply on which VAT isn’t charged and for which the related info VAT isn’t deductible.

Zero-rated supply:
A zero-rated supply is a taxable supply on which VAT is charged at 0% and for which the related information VAT is deductible. For example:

  • Exports
  • health care
  • Education
  • Worldwide transport of travelers and goods
  • The first sale of residential property
  • Medicine & medical equipment
  • Investment in gold, silver and platinum
  • Crude oil and natural gas

Standard Rate Supply:
An taxable supply at the Standard Rate is a supply on which VAT is charged at 5% and for which the related information VAT is deductible. All things which are not going under both exempted category, and also zero-rated category, are going under standard rated supplies.

Services that we offer in regards VAT:

  • VAT execution and preparation of Chart of accounts in your present accounting software
  • Assistance for VAT registration
  • VAT Accounting
  • Assistance for month to month VAT Payment
  • Assistance for quarterly VAT return filing
  • Assistance for VAT auditing