VAT (Value Added TAX)

VAT services by Accountax

What is VAT?

Many people struggle to understand what VAT or Value Added Tax is but it’s actually quite simple once you get a hang of it. Before we get into the technicalities, if you own or know someone running global or international business, it’s important to understand that VAT is being used by almost all the countries all over the world (with an estimate of 150 counties) including China, India, UAE and most of Europe.

The Taxation System!

The taxation system is now 5 years old in the UAE. Value Added Tax (VAT) and Excise Tax Laws and Regulations are emerging and being developed every day. Federal Tax Authority (FTA) is keen to develop the best Taxation System in the UAE and same time FTA is doing its best to develop a knowledge base of the Tax Payers.
The Taxation System in UAE by Accountax

VAT Registration

Voluntary Registration
  1. Minimum Sales Should be AED187,500/- for the last 12 months
    Sales will be crossing AED187,500/- in the next 30 days
  2. If you do not register when your sales are below or above AED187,500 to AED375,000/-
Mandatory Registration
  1. Sales crossed AED375,000/- in the last 12 months
    Sales will be crossing AED375,000/- in the next 30 days
  2. If you do not register then the penalty is AED20,000/-

VAT Deregistration

Voluntary Deregistration
  1. If Sales are below AED375,000/- and above AED187,500/- for the last 12 months
  2. If you do not deregister then there is no penalty
Mandatory Deregistration
  1. If Sales are below AED187,500/- for the last 12 months
  2. If you do not deregister then there is a penalty of AED10,000/-

VAT Return Filing

  1. For registered businesses, VAT Return Filing is mandatory
  2. VAT Return period can be one month or 3 months
  3. VAT Return must be filed within 28 days of the month it is due
  4. If a VAT Return is not submitted then the penalty is AED1,000/- for the first time and AED2,000/- if the repeated same thing in the next 24 months
  5. If VAT Payment due is not paid then there is a penalty of 2% and 4% for the first month then it increased by 4% every month
VAT filing companies in UAE

Voluntary Disclosure

  1. If the Wrong Tax Return is submitted and the mistake is for more than AED10,000/- VAT/Excise Tax then Voluntary Disclosure must be submitted
  2. If the mistake is for less than AED10,000/- then it should be adjusted in the next Tax Return
  3. There are multiple penalties for submitting Voluntary Disclosure which is based on the amount of mistake, the due date of the amount of mistake, and some other conditions.

How you can get benefit from us?

When VAT was introduced and being implemented, UAE didn’t have any fixed tax paying system due to the free zone option. When realized how beneficial VAT can be to one’e business and plays a vital role in enhancing the brand value, GCC countries agreed to implement VAT. The Ministry of finance, UAE, agreed on a 5% VAT rate that will be provided to the government.

The impact of VAT in the UAE was vast and is still going strong. Here at AccounTax, we make sure that your correct VAT rates are applied in each transaction to reduce the loss of VAT and fear of penalty. Whether it’s local or global, we provide you with the best services. We want our clients to have the best experience and for that we have hired trained professionals that will fulfill all your VAT requirements. 

Speak to our expert VAT advisors!

Get in touch with us for all your queries and we are there to assist you. Expert services are just around the corner.