What is the reason for the introduction of VAT in the UAE?
The government provides public services for citizens and residents, such as hospitals, roads, public squares, schools, parks, waste disposal, police and defense services, and many others. In order to pay for cheap vat registration services, the state has to generate enormous revenues. This can be achieved by levying taxes. The United Arab Emirates is a member country of the GCC and are closely linked through the “GCC Interstate Economic Agreement”. and the “Customs Union of the GCC”. The
member countries of the GCC worked together to draft and implement new public policies.
VAT Registration Threshold
If your company’s annual turnover is less than AED 187,500, your company does not need to be legally registered.
If the annual turnover of the company is between AED 187,500 and AED 375,000, registration under the UAE VAT Law is optional.
Registration of the company under UAE file vat return legislation is mandatory if the annual turnover of the company exceeds AED 375,000. Special rules apply to real estate companies and special rules should apply to commercial properties within the GCC.
What must UAE companies do?
Businesses should inquire whether their goods or services are taxable. If they are subject to the VAT Regulation, they must register on the VAT registration platform by the end of 2017. They must make the necessary changes to their financial and accounting records, record their financial transactions, accurately document their income and expenses, and related expenses. VAT Fees. . Make the necessary technological and human changes to prepare for VAT and make changes to the accounting software. Businesses have the option of hiring VAT specialists or outsourcing the work.Each taxpayer must keep the VAT invoices issued and received for at least 5 years. Once the government has issued guidelines and laws, companies need to check with professionals whether their goods and services are taxable.
VAT Compliance Check
UAE companies do not know if they have filed their returns correctly and some have filed them incorrectly. After the VAT registration number implementation, companies have to submit monthly or quarterly VAT returns, as required by the Federal Tax Office. In order to avoid a fine, no mistakes should be made when submitting a declaration to the authority.