Value Added Tax or VAT is a tax on the use of goods and services levied at each point of sale. Dubai has gone through several changes in the taxation system in the year 2018. In UAE, it was introduced on 1 January 2018 at 5 percent. Introduction of VAT in Dubai was a crucial point to the taxation system. This source of income will be helpful in providing high-quality public services. A business has to register for VAT if its taxable supplies and imports exceed AED 375,000 per annum and optional for businesses whose supplies and imports exceed AED 187,500 per annum.
Process after registration
Now the VAT registered businesses have to submit a ‘VAT return’ to the Federal Tax Authority (FTA) at the end of the tax period. Generally, the tax return is filed electronically through the FTA portal but you have to make sure that all the tax returns requirements are being fulfilled. Various details are required to be filled in by the businesses such as VAT return period, VAT on sales, VAT on expenses, details of the taxable person and few others.
Once the business is registered under VAT law, it highlights the business goodwill in the industry. In fact, there are many firms now which may not do business with the companies that are not VAT-registered. So, it is now a must for the entities to implement VAT filing in UAE and also it gives a proof of your business existence.
The VAT is an additional charge that needs to be paid and hence certainly it has an impact on the business operations and management and business relations (both the suppliers and customers’ side). It then becomes important to manage the VAT books in a proper way so as to avoid any mishaps.
Are you looking for the best-suited VAT Consultants in UAE?
While choosing a consultant it is imperative for a business firm to choose the expert who possesses great knowledge about all your business aspects and in-depth information about the industry and matters regarding their dominant field. So, you can either choose from inside the company, which has all in-depth information about the business activities and is responsible for preparing confidential and required documents and reports. The communication with the internal people will be more clear and transparent. You can also hire a consultant from outside which are experts in the particular field.
Now, talking about the VAT consultants, the business houses can reap many benefits by hiring them for the process, such as:
• They have full knowledge of the VAT concept. Firstly they can help determine if you need to register under VAT
• They can carry out the process in a quick way as being the experts in the field.
• Helps you in simplifying the entire process
• All the details about purchases and sales have to be maintained in order to submit the information about VAT. If the VAT charged by you is more than the amount you paid, then you will have to pay the difference to the government and if you have paid more than charged, you will have to claim the difference.
• The indirect tax rates change from time to time. So, hiring the services of a VAT consultancy in Dubai will help you meet the business goals and save a great amount of time
• The business and its employees gain the knowledge on VAT legislature
• Helps in executing all VAT related communication to your trade partners.
• They can provide all the necessary advice on the VAT knowledge in the direct interest of the business. It is very important for the businesses to understand the implication of VAT as the final responsibility is on the business itself.
• Make VAT payments at the right time. So the businesses will be in compliance with the given deadlines and make the payment due to the government. The experts will ensure that you do not have to pay a penalty for late payment.
• It is difficult as well as complicated for the companies to look after the issues regarding VAT and resolve it by dealing with the Federal Tax Authority (FTA).
• The businesses do not have to hire specific employees to manage the indirect taxes; they can outsource the services to an expert who will manage everything for you at small fees.
• Generally, companies are globally expanded. So, it is important that you focus on the areas that need your attention and leave the taxation in the hands of the experts.
A good VAT expert can surely help the company in keeping the operations smooth. Before hiring the Vat consultant Dubai or Vat consultancy services in UAE, there are many points which the companies should keep in consideration as described below:
• Full Knowledge of the VAT Law- at times, the details of the law can be tricky or complicated and can be harmful to the companies if proper understanding is not observed.
• Industry Specific- the expert should have an in-depth understanding of all the aspects of your business such as about the business goals, requirements, operating structure, etc.
• Experience of VAT consultant– “experience” is the major requirement in hiring VAT advisors in Dubai. He should have experience in taxes especially indirect taxes. The VAT will be the first tax to be implemented in the UAE, so there cannot be any case studies or examples to follow. But it is not new across the world.
• Technology friendly- as mentioned above, the return is filed online using the FTA portal, so, the consultant has to be well aware of the technology in use. Not only the portal; the expert should be able to use other applications available.
• Finance background- the consultant or advisor is required to have expertise in all fields of IT, operations and most importantly finance. The VAT has everything to do with finance.
• VAT planning mind- an expert has to be smart enough for the proper planning procedure in complying with the VAT laws which can save time and money.
• Cost Structure-the businesses generally look for consultants when they are not able to build the team within the company. So while making a hire, cost matters a lot.
Above mentioned are the various factors which are to be considered when looking for VAT Consultants in UAE. Although the choice always depends on your project and business, still, these guidelines can help you make out if the expert you are considering for your business is actually worth or not.
The consultants will handle everything for you and will also advise you to ensure that you are on the right path. Hiring VAT consultants will be the best decision the business can make. With their professional knowledge, expertise, and understanding, the consultants will certainly make the entire process of filing and updating the books of accounts smooth and flawless.
Alkhadim LLC specializes in Accounting, Auditing and Bookkeeping Services in Dubai, UAE and assists you in outsourced accounting services, bookkeeping services.