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The UAE is introducing VAT from 1 January 2018 onwards, and we're here to make sure you understand exactly what that means.
What is VAT?
Value-added tax is a consumption tax imposed on a product at each stage of production, before the final sale.
Prepare soon: are you compliant?
Any business that is required to be VAT registered and charge VAT from 1 January 2018 must register for VAT purposes, in the manner specified by the Federal Tax Authority, prior to that date
Normal requirements under VAT system the companies have to comply:
- Registering for VAT: Businesses which provide taxable goods or services with annual revenue of more than Dh375,000 will be required to register for VAT. Businesses with taxable supplies below Dh375,000 but over Dh187,500 will have the option to register for it.
- Calculating and reporting VAT: A VAT registered business is required to charge and remit VAT collected to the Tax Authority on a periodic and regular basis.
- Issuing Invoices: The process of charging VAT on supplies of goods and services requires businesses to issue VAT invoices.
- VAT Returns: Filing the VAT returns to the Government authorities by providing the relevant information requested by them, within the stipulated period.
- Payments of Tax to Tax Authority: A VAT registered should ensure that they make the payment of tax computed and due within stipulated date to Government.
- Bookkeeping: Maintain proper stock, invoices, accounts, VAT returns, and other relevant records to justify the tax paid at the time of purchase.
