VALUE ADDED TAX
Value Added Tax (VAT) was introduced in the UAE on 1 January 2018 as an additional source of income for the UAE Government to raise additional revenue while reducing dependence on income from the petrochemical industry.
Professional and Expert Roofing Contractor
There are different criteria for companies with regards to registering for VAT. A business must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum. However, it is optional for businesses whose supplies and imports exceed AED 187,500 per annum. In addition, the VAT laws vary depending on the goods and services offered for example there are separate Cabinet Decisions for Goods and Services Connected with Expo 2020 Dubai, the Mechanism of Applying Value Added Tax on Gold and Diamonds between Registrants in the State, and so on.
According to the Ministry of finance VAT-registered businesses generally:
Must charge VAT on taxable goods or services they supply;
May reclaim any VAT they’ve paid on business-related goods or services; and
Keep a range of business records which will allow the government to check that they have got things right
Financial Record
All businesses in the UAE need to record their financial transactions and ensure that their financial records are accurate and up to date and in compliance with article 26 of the UAE Federal Law No. 2 of 2015 on Commercial Companies, these records must be kept for a minimum of five years. At the end of each tax period, VAT registered businesses or the ‘taxable persons’ must submit a ‘VAT return’ to the (FTA) which needs to include the value of all supplies and purchases made during the tax period which in turn will show their VAT liability.
Our Vision
At AA auditing, we help our clients to understand all they need to know about VAT such as which supplies are zero-rated, and which sectors are exempt from paying VAT. Our bookkeeping and accounting service allow us to accurately track our client’s financials and file VAT returns in a timely manner.
