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
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 →
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 →
The FTA has made an announcement regarding a complete list of Goods and Services which will be influenced by the new UAE VAT regime. Supplies in transportation, real estate and financial services industries will be mostly exempt from VAT, while government activities will be outside of scope of VAT Tax. Continue reading →
Reverse Charge is a mechanism under which the recipient of goods and services is required to pay VAT instead of the supplier, when the supplier is not a taxable entity in the member state where the supply has been made. It’s used because the VAT registered purchaser has to account for VAT in respect of supplies. It’s typically used for cross-border transactions to relieve a non-resident supplier from the requirement to register and account for VAT in the country of the purchaser. Reverse charging is meant to put local and international suppliers on equal footing. Continue reading →
At the end of each tax period, a VAT registered business will either be due to pay tax to the FTA or get a refund depending on the amount of Input and Output tax incurred in that period.
Output VAT is the amount of tax you charge on the sales of your own goods and services both to ordinary customers and other entities if you’re registered for VAT. Input VAT is the amount of value added tax you’ve paid during the purchases of goods and services during a tax period. If the amount of Input VAT you’ve paid is lower than the amount of Output VAT you’ve charged, you’re due a net tax credit for the amount of the difference between those values. If the amount of Input VAT you’ve paid is larger than the amount of Output VAT you’ve charged, you’re due for a tax refund from the FTA. Continue reading →