VAT Tax inclusive prices

VAT Registered Businesses must display VAT inclusive prices to avoid penalties

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 →

VAT GIBAN payment

What is GIBAN and how does it make paying VAT and Excise Tax easier?

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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VAT registration consulting

VAT registration deadline extended until April 30th

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.

UAE VAT Reverse Charge Mechanism

VAT Reverse Charge Mechanism

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 →

VAT Tax Input - Output

VAT Net Tax Payable or Credit?

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 →