VAT Consultants, VAT Registration Services, VAT Filing Services

Overview of the meaning “VAT”

Value Added Tax is one of the methods of taxation, where tax is levied at every stage of production till the final good is sold to the customer. Unlike sales tax,where the end consumer pays the tax,VAT ensures taxation is divided among all the mediators in the production process. The amount of VAT the user pays is on the cost of the product, less the tax that has already been paid during the production cycle. This form of taxation (VAT) ensures there is no double taxation of the same product or services.

UAE to implement VAT from 1^st January2018

The new taxation regime will be rolled out on January 1, 2018.

Value Added Tax (VAT) is set to make its debut in the six-nation GCC block in 2018.The UAE Minister of State for Financial Affairs, His Excellency Obaid Humaid Al Tayer, has stated that the UAE will implement VAT at the rate of 5% from 1^st January 2018.

VAT is expected to be introduced at a rate of5%withsome limited exceptions including basic fooditems, healthcare and education VAT will be another source of raising revenues for governments in the Gulf Cooperation Council (GCC).

It is estimated that the UAE will generate more than Dh12 billion additional revenues in the first year after implementation of this new tax.

GCC countries have decided to implement taxation as part of the governments’ efforts to diversify revenues in the context of sharp decline in oil prices. The International Monetary Fund has been recommending fiscal consolidation in the GCC through diversification of government revenues and reduction of subsidies.

Key source of income

The introduction of VAT will help the UAE government to generate an estimated Dh12 billion worth of revenue in the first year, which will increase to Dh20 billion in 2019.Collection of VAT will boost government revenues.

Rate of Taxation:

Taxation rate in UAE will be 5% on all goods and services. Government has decided upon the marginal rate of 5% in the interest of the residents, as purchasing power of the consumer will not be hampered to an extent. Thus implementation of VAT will not have adverse effect on the people who are on the lower end of the spectrum.

However GCC has agreed on three VAT rates that will levied by the member states at the time computation of tax:

• Standard Rate
• Zero Rate
• Tax Exempt

Standard Rate

The rate of 5% will be applied on the all the business sectors.(does not hold good for zero rated and exempted goods).It is mandatory  that all  invoices feature tax value separately and then be added to the final bill value. All invoices must also display VAT registration number to enable buyer to claim VAT credit.

Zero Rated:

As the term suggests, the tax is computed at the zero rate. The tax column in the invoice of the sold good will be zero. Only the cost of the good will be charged.

In the contrary if tax has been paid for zero rated goods, tax credit of purchases can be availed for the sold good. You will need to record any zero-rated supplies in your VAT account and report them on your tax return.

Zero Rated Items:

• Exports outside GCC
• Food items as per GCC list
• Medicine and Medical Equipment as per GCC list
• Supply of sea, land and air means of transportation
• International and Intra GCC transport and services
• Charity organizations
• First supply after extraction of gold, silver and platinum
• Supply for educational purposes and related goods and services beneficial for educations
• Residential real estate – first supply

TAX Exempt:

The Tax Exempt supplies are not charged with VAT; however any tax paid earlier on purchases of the item is not available for credit.

As an example consider a taxi service (local passenger transport) that is tax exempt and will not collect any VAT from passengers. Though it will not collect any tax it will not be able to get credit for the tax they have paid for purchase of motor vehicles.

GCC: Tax Exempt List

• Imports of goods which are custom exempt
• Local passenger transport
• Bare Land

UAE: Additionally exempt

• Residential buildings other than zero rated
• Some specific financial services – margin based

Penalties will be imposed for non-compliance.

Examples of actions and omissions that may give raise to penalties include: A person failing to register when required to do so
. A person failing to submit a tax return or make a payment within the required period
. A person failing to keep the records required under the issued tax legislation
. Tax evasion offences where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.

Registration Of Business Entities under VAT

A company whose annual turnover is equal or above AED 375000   should register it self under the Federal Law before 2017. If the Annual Turnover is between AED 187,500 & AED 375,000/, it is optional for the company to be registered under UAE VAT law. Further, if it is less than AED 187,500/, the company need not register under this law.

However, for the ease of the business, supplier may not be registered if the business does not make any supplies which are eligible for 5% tax. %. If exception from registration is granted, then you will not submit regular tax returns and you will not be able to recover input tax incurred.

Details required for registration:

• Description of business activity
• Last 12 months turnover figure
• Projected future turnover figures
• Expected Import and export values
• Whether company is interested in dealing with GCC suppliers or customers.
• Details of custom authority registration.
• Trade License
• Emirates ID Authorized signatory can be a person who has the power of Attorney to sign on behalf of the business.
• Certificate of Incorporation
• Articles of Association
• Bank Details.

Upon Successful registration TRN Tax Registration Number will be issued within 20 days .

Who can opt for Group Registration?

In the UAE, many companies both corporates as well as SMEs operate with multiple licenses and work as one group. The companies might be registered in different emirates under different authorities, but operate together as a group. In such cases, they can look for registering together as a Tax Group. Following conditions are to be satisfied to opt for registering as a Tax Group.

1. All companies should have their main office with license (place of establishment) or a branch office or representative office (called fixed establishment) in the UAE.
2. They should be related parties.
3. Either one controls others, or two or more persons together control the others.

In practical scenario, even though one is not a shareholder in all companies but is controlling the companies by his power of attorney, it can be considered as related party for the purpose of VAT group and can choose Tax Group option.

Further while registering as a Tax Group, we should provide an evidence of the group structure showing the controlling or shareholding structure as well as a board resolution from each member companies resolving that they have appointed a company as the representative of the group for VAT purpose.

What are the documents to be kept ready before you proceed for registration?

1. Trade license copy
2. Memorandum of Association of the company
3. Articles of Association of the company
4. Passport copy of the manager/authorized signatory
5. Emirates ID copy of the manager/authorized signatory
6. Power of attorney copy (if any)
7. Financial Statement/Audit Report/Sales Calculation Sheet
8. Certificate of Incorporation (wherever applicable)
9. Customs Authority registration Certificate (if applicable)

What are the important points we have to consider while giving the bank account details?

If you are registering your company as standalone, you can give any one of the UAE bank accounts. You have to provide the name of the bank, branch name, account name and IBAN code. You should give the bank account of the company for which you are registering, and not of any other related party bank account.

If you are registering for VAT under TAX group option, you can give only one bank account number; not of all companies of the group. This bank account will be of the representative company which you choose while registering for VAT as Tax Group.

Can we submit the VAT online registration in English also or Arabic is mandatory?

You can submit the application in English as well. However, there are 3 columns where we have to submit the information in Arabic as well.

1. Name of the company
2. Name of the manager
3. Name of the authorized signatory

Importance of VAT returns:

It is mandatory to file returns as government has to generate revenues for country’s betterment. It also has a check on the black money as returns are filed every quarterly. The possibility of money laundering is handicapped by periodical checks.

No manual returns are accepted on the desk. It is mandatory that all the companies registering under VAT should go through online process of registration. This is basically adopted to avoid any kind of manual manipulations. Delay by any tax payee in filing tax return will be penalized by the tax authority.

VAT Return Due Date

The last date to file VAT returns will be the 28th of the subsequent month following the end of the tax period. For quarterly VAT returns, due date will be 28th of the subsequent month following the end of the quarter. The last date to file VAT return for the year 2018 is given below:

For the monthly return, the last date to file VAT return will be 28th of the subsequent month. For example, for the return period of January 2018, the last date will be 28th February, 2018.

Upon registration on the VAT portal, each taxpayer will be given a unique TRN and password for their online account on the website. These details are to be used to file returns online. Follow the steps below.

1. Visit the online portal of the Federal Tax Authority at tax.gov.ae
   Click the return filing option under the e-services section of the portal
   3. Log in using your TRN and password
   4. Fill in the VAT return form with the details of your business, transactions, tax liability, penalties (if any), etc.
   5. Upload the required documents, bills, etc.
   6. Verify the details filled by you and submit the form.

VAT Consultants, VAT Registration Services, VAT Filing Services in UAE

Need for VAT Consultant:

The inception of new taxation form VAT demand more control and safety on stock, invoices, 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 govt etc.  for the smooth processing of the business operations. Then the role of the accountant will be very important for the compliance of VAT. Maintenance of 5 years of accounts and records is also important as per new company law etc. Business should be very careful in choosing right VAT consultant. Below are few key points to consider while opting for VAT consultant.

• VAT Planning
• Updating client about VAT rules and regulation
• Tracking all the updates OF vat for immediate implementation
• VAT registration of the firm
• Maintaining records f VAT related documents
• Awareness of VAT rates
• Filing returns
• Liaising with tax authority

List Of VAT consultant in Dubai

List Of VAT consultants in Abu Dhabi

List Of VAT consultants in Sharjah

Reach Accountant Best VAT Software for VAT Consultancies in UAE

Reach accountant proves to be your best companion to resolve and   tackle all business issue pertaining to financial reports, auditing ,reformation of business structure in lines with new taxation regime.

Beneficiaries Of Reach  VAT Software:

Ideal for:

• Chartered Accountant
• Tax Consultant
• Outsourced Bookkeepers
• Business Consultants

Need to upgrade to Reach VAT Accountant Software :

Reach Accountant software is well designed to match all the needs for successful running of the business. The software can be used in different industries ,traders ,manufacturers, retailers,  workshop ,business projects etc. It is an accounting software that can automatically manage your book of accounts, taxes, inventory, sales, purchases and more online quickly and securely

Top Features of the Accounting Software are:

Accounting Management: All functions relating to accounts are inbuilt with the software. You can manage your Accounting Ledgers, Bank & Cash Operations, Purchase & Sales Estimates, Warehouse Allocations, Expense Recording, Expense Grouping, Payments – Part or Full, Journal Entries, Income and loss a/c, Balance sheets, Receipts – Part or Full, Contra Entries, Financial Reports, Day book.

Tax Management: Our accounting Software automatically calculates the taxes relevant for every bill created. The Software is designed as per the government norms for calculation of VAT. It also has the option to add any number of taxes relevant to the business. In case of change in tax percentages a change it in the software on your own. All you have to do is add your tax percentage and our software will calculate the taxes automatically. This multiple tax scheme can also be applied to multiple products on a single purchase.

Income Management: The Company can create Quotations then the same can be converted as a Sales order or Pro-forma invoice or Invoice. From Invoice you can create Receipts as well. Accountants will be able to know what payments have been received and what are pending in the reports. You can also set reminders for receiving payments.

Expense Management: You can create Purchase Orders then the same can be converted as bill or payments. You can also create Debit notes for purchase returns. Accountants will be able to know which purchase bills have been paid and which are pending in the reports. You can also set reminders for making payments.

Receipt: Receipts can either be manually entered or imported  it in excel format easily.

Payments: Payments can either be manually entered or imported it in excel format easily.

Multi Company: Manage business through comfort of the smart phone.

Tally Import: Tally files can be easily imported to Reach Software of various periods and manage business easily.

Auditor’s Report: Full Financial Report are available,Read process by Auditor,Tax Reports,VAT Report with e-filing options,PF & ESI Reports,Tax Consulting Modules are some features mentioned.

Mobile Application: Access business information through tabs and android smart phones, pick photos of expense vouchers and attach to expenses, daily profitability and other key reports can be viewed on phone.

Bank Synchronization: Bank Statements can be imported in to Reach software through excel files.

Security: There is complete security of data stored in the hard disk. Data can be accessed and control by creating access restriction. One time password   facilities also ensures a check in the log in to the website.

Run Business from anywhere: The business can be run access data from anywhere at your comfort. Just like checking mails from the laptop or systems.

Free and Automatic Upgrades: At Reach Accountant you will be provided free services of upgrading the software frequently with new features and use it absolutely free.

No investment in expensive hardware: The software is browser based. It just requires internet connection which can be connected to multi computers without using LAN and servers.

Automatic Data Backup: Reach stores all the data in servers offsite with regular backups. Hence business information is safe and secure.

Top Two Features of the Reach Accounting Software

Outsourced Accounting: The software enables to finish the outsourced accounts in less than 30 minutes.

Real Time Accounting: Allows client to record sales and purchases online, while finalizing accounts   that is checking the Audit trail, providing MIS reports, checking Tax reports, printing financial reports and filing taxes.

Technology Used

Reach has implemented the latest technology Cloud Computing to handle  day to day business transactions just  a click away from your browser from any part of the world.

Cloud Computing:

Cloud Computing is a concept through which organizations can manage their data centres, processes and applications online via internet on the scheme of pay for use basis.