ASSIST PLUS VAT CONSULTANCY SERVICES

The announcement by the UAE Federal Government regarding the imposition of a Value-Added Tax came as no surprise to the seasoned analysts in the business world. The Gulf Cooperation Council (GCC)  Economic Agreement in 2001 laid out the groundwork for the integration of the GCC economies and increasing congruency in the fiscal regulatory framework, based on this directive the GCC Supreme Council agreed in December 2015 to impose a GCC-wide rate of VAT pegged at 5% and started working towards a unified legal framework to facilitate the introduction of this tax across the GCC. 

Naturally, the announcement of the imposition of this tax has created a lively debate on the pros and cons of VAT taxation and the potential impact it will have on business operations and the economy at large. No one can argue that the GCC states are exposed to an abnormally high risk of fluctuations in the commodities market, particularly in oil and related petrochemical products, and taxation in some form is universally seen as the principal means with which regional governments can cushion the negative impact of fluctuations in commodity prices on their budgets and spending. 

How Does Vat Affect my Business in UAE?

According to the UAE Government, VAT will apply to a majority of transactions in goods and services, with only a limited number of services and goods being exempt. To date, some of these exemptions have been named as being some real estate transactions, some transaction types related to sharing dealing, education and basic/preventative healthcare to name a few. This will require businesses of all sizes to maintain accurate financial records that enable them to inform the Federal Tax Authority of their company's financial position at any given time. Tax charged to customers for services rendered must be cited on invoices and collected and then repaid to the Federal Tax Authority.

For some businesses who are already maintaining their financial records and books at a high standard, this will be a minor consideration, for others, it will represent a paradigm shift in their internal accounting/bookkeeping practices. In addition to this, the accrual and management of VAT collected by companies and the legal framework surrounding claiming back VAT from the Federal Tax Authority will represent an operational and logistical challenge to all businesses. 

Our VAT Consultants in Abu Dhabi Will Enable You to Implement a Seamless Transition

 

At Assist Plus, our team of highly experienced accountants, auditors and business advisors will work with you to assist and manage your company's transition to the new VAT regulatory framework, ensuring the transition is as smooth as possible with minimal impairment and cost to your logistics and operations. As your tax consultants in Abu Dhabi, we will work together with you to identify goods and services for which VAT is applicable and assist you in claiming back VAT for goods and services that are exempt from the VAT. We are one of the trusted tax consulting firms in Abu Dhabi providing thorough and detail-oriented VAT consultancy services that allow businesses to fully comply with UAE’s new legislation and financial framework while implementing a streamlined and scalable process within their organisations.  

How to Open the VAT Return and Getting Started

Registration Criteria:

 

(Mandatory registration) You will be required to be registered when the VAT law is in force if you are a business that is resident in the GCC and you are making supplies of goods or services in the UAE and either:

  1. Your turnover was more than AED 375,000 in the last 12 months; or

  2. You expect that your turnover will be more than AED 375,000 in the next 30 days.

(Voluntary registration) If you are not required to register, you will be eligible to apply for registration when the VAT law is in force if:

 

  1. Either your turnover or expenses (which will be subject to VAT) were more than AED 187,500 in the last 12 months; or

  2. You expect that either your turnover or costs (which will be subject to VAT) will be more than AED 187,500 in the next 30 days.

 

  • Who is registered for VAT purposes

    When you register for VAT, you are registering the person that is operating a business, not the business itself. A person can be an individual (i.e. operating as a sole trader), or a legal person (further defined in Section 4) or another form of entity (e.g. an unincorporated body such as a charity or club, a partnership or trust). A VAT registration covers ALL of the business activities undertaken by the registered person. 

    When you apply for VAT registration we will ask you for information relating to the person that is to be registered, and the current/intended business activities of that person.

    Federal or Emirate Government bodies and other similar entities in the UAE are to be registered in the name of the relevant body, notwithstanding the fact that they might not be operating a business in the normal sense.

 

  • Your obligations at this time

    The Federal Tax Authority (FTA) is inviting applications for VAT purposes (where the registration criteria set out below have been met) in the interim to help businesses operating in the UAE prepare in good time for the implementation of VAT on 1 January 2018.

    Businesses with a turnover of over AED 150M should apply to register before 31 October 2017. Firms with a turnover of over AED 10M should apply to register before 30 November 2017. All other businesses need to have applied by 4 December 2017 to be registered by the start of 2018.

 

Documents and information mandated to register for VAT in the UAE:

Prior to applying for VAT Registration, organisations are required to prepare the documents mentioned below. Soft copies of these documents should be uploaded along with the organisation’s application.
 

  • Proof of identity of the authorized signatory, such as passport copy and Emirates ID

  • Copy of the company’s trade license

  • Other official documents authorizing the entity/individual to conduct activities within the UAE, e.g., articles of association, certificate of incorporation, power of attorney, etc.

  • Description of business activities

  • Turnover for the last 12 months in AED

  • Documents supporting the entity’s 12-month sales

  • Expected turnover in the coming 30 days

  • The estimated value of imports for one year from each GCC country

  • The estimated value of exports for one year to each GCC country

  • Anticipated deals with GCC suppliers and/or customers

  • Supporting documents for customs registration in each Emirate, if applicable

  • Bank account details