As we all are aware that VAT had been implemented in UAE effective 01st January 2018, since then, there are companies and entrepreneurs who would like to know the aspects of compliance to adhere to VAT Legislations in place.
The businesses in UAE and whose value of taxable supplies in previous 12 months has exceeded AED 375,000 should mandatorily register under UAE VAT. Also, if the businesses anticipate that the total value of taxable supplies will exceed the mandatory registration threshold of AED 375,000 in the next 30 days, then they too will have to register under UAE VAT.>
A business can also opt for Voluntary Registration, if the Value of taxable supplies in Previous 12 months exceeds AED 187,500 but below AED 375,000.
The non-resident businesses, who do not have a place of residence in the state of UAE, but makes a taxable supply, will have to compulsorily register under VAT irrespective of the registration threshold.
This is an important aspect of compliance as per the UAE VAT Law. All Business in UAE is required to maintain proper financial transaction records. The businesses will be responsible to ensure the fact that financial records are accurate, updated and trustworthy. These financial records will serve as pieces of evidence to identify if the company is meeting minimum annual revenue criteria and whether it is mandatory for the firm to get registered under VAT. As per the Ministry of Finance in UAE, it is crucial for every company to maintain records of financial transaction even if the body thinks that it won’t be required to get registered under VAT.
All VAT registered businesses in UAE need to collect 5% VAT on its standard rated taxable supplies of goods and services made within UAE.
All VAT registered businesses in UAE can reclaim the 5% VAT paid on its standard rated taxable purchases of goods or services purchased within UAE.
All VAT registered businesses in UAE have to submit a Periodic VAT Return to the Federal Tax Authority and pay the taxes due as per the computation. In UAE, The VAT Return Period is assigned by the Federal Tax Authority. The standard VAT return period applicable to most of the taxpayers is quarterly return i.e. three calendar months. Also, depending on the Annual Turnover of the taxpayer, the FTA may set to file the VAT return on a monthly basis. The last date to file the return shall normally be the 28th day following the end of the VAT return period. For example, if the VAT return period is January-March, the last date to file VAT return will be 28th April.
The VAT return filing period applicable to each of the taxpayers will be available on FTA portal. The taxpayer can log in to the portal using his login credentials and check the applicable VAT return filing period.
