On January 31, 2022 the Ministry of Finance of the United Arab Emirates (UAE) announced the introduction of a federal Corporate Tax (“CT”) on business profits, effective from the beginning of the financial year on June 1, 2023.
The UAE CT regime will be based on international best practices, with a low / minimal compliance burden on businesses.
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The VAT return fines and penalties in the UAE are considerably high. With the filing deadline fast approaching for the next batch of VAT returns, it’s important to make sure that all VAT returns are accurate, error-free and that all due VAT is paid on time. Continue reading →
The FTA has announced that all businesses subject to VAT and Excise Tax must display prices of goods and services inclusive of tax in order to avoid administrative penalties. The FTA called on consumers and service recipients in the UAE to exercise their rights and make sure that the prices displayed on items or services they buy display the total amount of tax charged. Continue reading →
In a step to facilitate paying due tax, the FTA is introducing a new method of paying due tax as follows:
- A GIBAN is a unique IBAN number that is given to every taxable person
- A taxable person can make a fund transfer from certain UAE financial institutions using the GIBAN provided by the FTA
- This payment method can be used for settling any outstanding VAT and Excise Tax amounts payable, including tax and penalties
- This option should not be used for other payments such as Miscellaneous Payments
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All UAE businesses which have missed the VAT registration deadline are exempted from penalties for another couple of months by the FTA.
The FTA gave these companies until April 30 to register for VAT to avoid administrative penalties as many of them were smaller companies, companies located in the free zones or branches of foreign companies. The FTA has already registered around 260,000 businesses and there’s been a steady increase in tax compliance ratios. “Overall response levels to the new VAT regime by all segments of society are very satisfactory”, Sheikh Hamdan noted.
If your business is not VAT registered yet, contact us today and we will make sure to get you registered before April 30th and help you avoid administrative penalties.
Obaid Al Tayer, the country’s Minister of State for Financial Affairs has confirmed that there will be no changes in VAT and excise tax rates. Continue reading →
The FTA has clarified that online purchases are not VAT exempt and 5% VAT rate is applicable on all purchases made through online shopping portals just like any other purchase made through traditional outlets if the products purchased online are received within the UAE. Continue reading →
The FTA has changed the timeline for filing the first VAT return making it easier for companies to report and comply for VAT. This change is especially significant for SMEs which might have a harder time complying with VAT than larger companies due to less resources.
The VAT Return period has been relaxed and the FTA has provided the first VAT return period from January 1st up to May 31st and after that the filing returns will be made quarterly. The first return will need to be filed on or before June 28th and later returns from June 1st up to August 31st, September 1st up to November 30th etc. Continue reading →
From January 1st, the way UAE businesses conduct their day-to-day operations and the spending habits of residents has seen a major shift as the UAE moves away from tax-free nation by levying a five per cent Value-Added Tax (VAT) on goods and services. Continue reading →
UAE VAT Implementation is right around the corner so we’re taking a look at another crucial thing for any business operating under the VAT regime to plan for – Input VAT Recovery.
Input VAT Tax is VAT levied on all taxable inputs of capital goods, raw materials, spare parts, services etc., which a business consumes or uses in its business. Continue reading →