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VAT Consultants Dubai FBS Group: We Make VAT in the UAE Simple For You!
VAT Consultants UAE – FBS Group: Manage Your UAE VAT Risks and Benefit from the Services of Premium Dubai VAT Tax Consultancy, VAT Consultants Dubai and UAE VAT Accountants in Dubai… With Fees from as little as AED 1000 pm!
VAT Consultants Dubai | Dubai VAT Tax Consultancy
Members of The FBS Kotsomitis International Group in RAK – Watch our International Group Video Profile as Broadcast by FOX 5 News – Our Group‘s Global Reach…
VAT Breaking News: The New UAE VAT Law has been Published!…
The New UAE VAT Law has been Officially Published. Read More…
** Click Here for a Free Dubai VAT Services Quotation or To Discuss Your UAE VAT Needs **
VAT Consultants Dubai – FBS Group: Scope of UAE VAT Services
We are Top-Tier VAT Consultants in Dubai and UAE VAT Tax Consultancy in Dubai. We provide Comprehensive UAE VAT Professional Consultancy Services and UAE VAT Consultancy Services to Businesses across the UAE and Located in Any Emirate of the UAE: Dubai, Ras-Al-Khaimah, Abu Dhabi, Sharjah, Fujairah, Umm-Al-Quwain, Ajman… At Any Level of Complication: From Small Start-Ups To Large International Concerns!
“UAE VAT Services from FULL Outsourcing of Your UAE VAT function (Plus+ if required, Accounting, Financial Statements and Audit) to just VAT Consulting, VAT Support, VAT Compliance Monitoring and Review …To Anything In-Between!”
“UAE VAT Services For Small Businesses Without an Established Accounting Function: We Undertake the Whole Accounting Function – Bookkeeping, Accounting, VAT, Financial statements, Audit, Consulting”
“UAE VAT Services to Professional Intermediaries in the UAE: Click Here to Read How You can Outsource Your Services to Our Group and Best Serve Your Clients“
** Click Here for a Free Dubai VAT Services Quotation or To Discuss Your UAE VAT Needs **
Information We Require From You to Prepare a UAE VAT Services Quotation
Watch our International Group Video Profile as Broadcast by FOX 5 News – Our Group‘s Global Reach…
Practical UAE VAT Guides and How FBS Can Help You
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Latest UAE VAT Important Updates & MOF Announcements
Our A to Z Guide for VAT in the UAE – Everything you need to know About VAT – from A to Z
A Short ‘Road-Map” to UAE VAT Implementation – How to Manage the UAE ‘VAT Challenge’!
Practical and Useful UAE VAT Implementation Tips – To Help You Get Your Business “VAT-Ready”
How We Can Help You! – Detailed list of Our UAE VAT-Related Services
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Fees for VAT Consultants Dubai – Dubai VAT Consultancy Services
Ongoing Annual Fees for VAT Consultants Dubai. Dubai VAT Tax Consultancy Services, UAE VAT Compliance Fillings and Basic Consulting Services: From AED 1000 per month (AED 12000 p.a.) – A full written quotation will be furnished.
We provide Comprehensive UAE VAT Professional and Consulting Services to Businesses Across the UAE and Located in Any Emirate of the UAE: Dubai, Ras-Al-Khaimah, Abu Dhabi, Sharjah, Fujairah, Umm-Al-Quwain, Ajman. FBS is the leading firm of VAT Consultants in Dubai.
Contact Us To Get a Quotation Or To Discuss Your Needs
Click Here for a Free Dubai VAT Services Quotation – Make Sure You include FULL contact details of yourself and the Company subject to Dubai VAT, As Well As FULL details of activities and business lines; or Call Our Offices…
RAK Head Office: +971 7 244 7676
UAE VAT Services to Professional Intermediaries in the UAE
We render UAE VAT Consulting Services in Dubai to Professional Intermediaries who are not officially licensed for: UAE VAT Accounting in Dubai or Other Emirates, UAE VAT Compliance in Dubai or Other Emirates, UAE VAT Tax Consultancy Services in Dubai or Other Emirates, UAE VAT Advisory in Dubai or Other Emirates or UAE VAT Consulting Activities in Dubai or Other Emirates in the UAE (company formation agents, PRO’s, lawyers and other professional firms).
Refer Your VAT Clients to Us for Mutual Benefit with the Best Interests of Your Clients in mind. We understand these are Your Clients and all our communications will be with yourselves, as the client’s agents. Our Group adheres to the highest standards of ethics in relation to dealings with professional intermediaries, which is the cornerstone of our operations. Click Here to Contact Us Now or to Arrange a Meeting with Our UAE Directors to Discuss Yours and Your Clients’ Needs.
UAE VAT is Coming to Dubai on January 1st, 2018 – Is Your Business VAT-Ready? …VAT Consultants Dubai (FBS Emirates) Stand Ready to Help!
UAE VAT Law is coming to Dubai and the UAE as well as all the Gulf Region. And will be here to stay. Time to Register and Account for VAT in Dubai and the UAE and all of the UAE soon. Are you 100% sure you know what the UAE VAT Law and circulars require form you? Are you aware of the fines related to non-compliance? Did you examine your systems, product lines, operations to assess the UAE VAT impact and risks?
UAE Free Zone companies as well as local LLC companies will most definitely be affected.
Are you ready? Did you appoint Dubai VAT Consultants – Accountants? Do you know the next steps? Don’t Get ‘Caught Out” … it could mean hefty fines and complications.
Read our ‘A to Z Guide to UAE VAT’ to get you started in the preparations to face the challenge of VAT in the UAE or Our Practical and Useful UAE VAT Implementation Tips – To Help You Get Your Business “VAT-Ready” ASAP!
Click Here for a Free Dubai VAT Services Quotation
FBS Emirates: VAT Consultants Dubai – Dubai VAT Consultancy
We are Your Expert VAT Consultants Dubai and Dubai VAT Consultancy. The ‘Go To’ professionals and Trusted Partners for ALL your UAE VAT Tax, Accounting and Audit Needs… Read our ‘A to Z Guide to UAE VAT’ to get you started!
We have an experienced Dubai VAT Team of Professionals who are Expert UAE VAT Consultants Dubai and/or Professional Dubai VAT Tax Consultancy. They stand ready to support you fully to face the challenges of the introduction of VAT in the UAE and minimise the risks of lost deadlines, wrong reporting / fillings, penalties and fines. With Your Peace of Mind and Your Minimum Involvement. We are part of The FBS Kotsomitis International Group.
We operate from our Fully-Fledged UAE Offices which are located in Al Hamra Village in RAK.
How Can FBS (‘VAT Consultants Dubai’) Help Your Dubai Business
We have an expert team of professionals who are part expert VAT Consultants Dubai and Members of the FBS Kotsomitis International Group, who can help you with:
- Consulting for Your Particular Case in All Aspects of the UAE VAT Law
- Registering for Value Added Tax (VAT) in the UAE
- Keeping accurate accounts, in compliance with UAE Value Added Tax (VAT) regulations
- Making VAT payments at the right time
- Preparing and filing VAT returns
- Objections and tax disputes
Read More Details about Our UAE VAT Services…
Read below about what is coming your way in terms of VAT in Dubai and the whole of the UAE.
Click Here for a Free Dubai VAT Services Quotation
The Time Has Come for Businesses in Dubai to Start Planning for the Introduction of UAE VAT…
Heads of companies and directors in the UAE need to seriously and carefully consider how VAT will impact their businesses. They will need to ask themselves the following questions:
- Does the company have a strategy for implementing VAT?
- Are the company’s existing systems and processes compatible for VAT introduction?
- Does the company have the human resources necessary (accountants/bookkeepers) to deal with VAT?
- What training is necessary and which employees need to be trained?
- Which of the company’s transactions will be affected by VAT?
- Are there any intercompany or intracompany issues to be considered?
- Which contracts need a VAT action?
- Has the company considered the impact of VAT on its customers?
- Does the company need the services of experienced VAT specialists?
We advise you to start preparing now so that your company is ready for the coming of the UAE VAT ‘era’…
We are tax and VAT specialists with around 20 years’ experience in the EU and can provide 100% of the services and advice needed to face the UAE VAT challenges that lie ahead.
Click Below NOW To Read:
Our A to Z Guide for VAT in the UAE – Everything you need to know About VAT – from A to Z
A Short ‘Road-Map” to UAE VAT Implementation – How to Manage the UAE ‘VAT Challenge’!
Practical and Useful UAE VAT Implementation Tips – To Help You Get Your Business “VAT-Ready”
Watch our Corporate Group Video Profile as Broadcast by FOX 5 News – Our Group‘s Global Reach…
How We Can Help You! – Detailed list of Our UAE VAT-Related Services
Your A to Z Guide to VAT in the UAE
VAT in the UAE: Everything You Need to Know… From A to Z!
To ‘Start You Off” and help you with your preparation for the new ‘VAT Challenge’ in the UAE We prepared for You a Comprehensive but Easy-to-Read and Understand Guide to VAT in the UAE. It covers all areas of UAE VAT Law, the Principles of UAE VAT, your Obligations, your Actions, ‘How To’ guides to VAT Compliance and VAT Registration in the UAE as Well as some Practical Examples.
Click HERE to Read Your Guide to VAT in Dubai
Click Here for a Free Dubai VAT Services Quotation
FAQ’s on the Responsibilities of Dubai Companies and UAE VAT
| Question | Answer |
| Are all companies in the UAE required to register for VAT? | Businesses meeting the minimum annual turnover requirement must register for VAT. Some companies that provide only goods/services that are not subject to VAT may not be required to register. Note: minimum annual turnover figures and details of specific goods/services that will be exempt from VAT will be announced shortly by the Government. |
| What about companies that are not required to register for VAT? | Companies that will not be registered for VAT should still maintain financial records in case they will be registered in the future or in case the Government needs to check them. |
| When should companies register for VAT? | Companies that meet the VAT requirements criteria can register online for VAT three months before the launch of the UAE VAT. This is likely to mean that companies can register from 1st October 2017. |
| Will companies be able to register on-line? | Yes companies will be able to register on-line. |
| What will the responsibilities of VAT-registered companies be? | All companies in the UAE will be required to:
VAT-registered companies must report the VAT amount charged and the VAT amount VAT paid to the Government regularly with a formal submission. Note: Specific details on the type of records required and instructions on the period of time for keeping records are still to be announced. |
| How often will companies be required to file their VAT returns? | Businesses will need to submit VAT returns regularly, probably every three months. |
| What happens if a company does not comply with VAT? | Full compliance with companies’ VAT responsibilities is a must. Fees and penalties will be imposed for non-compliance. |
| Who can help my company with VAT reporting? | The Government will provide information and support to companies. However it is the responsibility of each company to hire accountants, new systems etc. Our firm has set up a specialist VAT Department in our Dubai Office in order to assist clients with VAT compliance – Click Here for a Free Dubai VAT Services Quotation |
It will be interesting to see if the introduction of UAE VAT just ahead of proceedings for Brexit will benefit the UAE as multinational and foreign companies based in the UK might want to relocate their headquarters and operations and are bound to consider the UAE due to its:
- Low tax base
- Superb infrastructure
- Strategic location
It should be noted that a UAE VAT rate of 5% is unlikely to deter foreign companies and multinationals from setting up their headquarters and operations in the UAE. This is because they are used to paying higher VAT rates in their home countries.
Bottom line: The UAE will retain its status as a low tax jurisdiction. This, as well as the UAE’s firm position as a world class regional business hub, will continue to attract multinationals despite the introduction of VAT.
Click Here for a Free Dubai VAT Services Quotation
General FAQ’s on UAE VAT
| Question | Answer |
| Quite simply…. What is VAT? | VAT (Value Added Tax) is sometimes referred to as a general consumption tax. VAT is an indirect tax that is imposed on the majority of goods and services that are bought and sold. VAT is levied at every step of the supply chain. End consumers normally bear the cost of VAT. |
| What is the average VAT rate globally? | The average VAT rate in the world is about 15%. The highest VAT rate for an OECD nation is Hungary at 27%. The UAE VAT rate of 5% will be the lowest VAT rate in the world. |
| Why is the UAE Government imposing VAT? | Quite simply VAT will be a strong, reliable source of income for the Government so that it will be able to provide its citizens with the many high quality services that they are used to. Also it is very important for the UAE Government that it gradually reduces its independence on oil revenues. |
| Will other GCC countries implement VAT? | Other GCC countries may also implement VAT on 1 January 2018 or later, but by 1 January 2019 the latest. |
| Will VAT be imposed on all goods and services? | UAE VAT is expected to be introduced on most goods and services with some exceptions which are likely to be basic food items, education and healthcare. The Government will announce the goods/services that will be VAT-exempt. |
| Will the cost of living in the UAE increase? | Consumers will be paying more so the UAE cost of living will increase. However, it all depends on how much an individual spends on goods/services that are VAT-exempt and how much an individual spends on non-essential goods/services that are taxable. |
| Will tourists and visitors need to pay VAT? | Yes tourists and visitors will pay VAT when purchasing services/goods. |
| Can an overseas company visiting the UAE reclaim VAT? | Foreign companies will be able to reclaim VAT if they visit the UAE. Also UAE companies will be able to reclaim much higher VAT rates when they visit other countries. |
| Will the UAE impose other taxes? | The Federal Tax Authority (FTA) has just announced a tax of 100% on tobacco and energy drinks and a 50% tax on carbonated drinks. This tax will be applied in the last quarter of 2017. |
| Will the UAE impose income taxes? | No. The UAE Government is not considering imposing personal income taxes. |
| Are there specific individuals or organizations that will be exempt from paying VAT? | This is yet to be announced by the Government. It is possible that there will be special rules or refunds only for specific cases. |
| What information is available on UAE tax law? | The law on UAE VAT will be published by the Ministry of Finance as soon as it is finalized and approved. The Government will also launch VAT education and awareness campaigns.
Our firm has set up a specialist VAT Department in our Dubai Office in order to assist clients with VAT compliance |
Click Here for a Free Dubai VAT Services Quotation
There is no doubt that introducing VAT at the rate of 5% from 1st January 2018 is a smart move by the UAE government.
Our firm has set up a specialist VAT department in our Dubai office in order to assist clients with VAT compliance.
A Guide to VAT in the UAE
VAT in the UAE: Everything You Need to Know… From A to Z!
We are Your Expert VAT Consultants Dubai and UAE VAT Tax Consultancy. The ‘Go To’ professionals and Trusted Partners for all your UAE VAT Tax, Accounting and Audit Needs…
To ‘Start You Off” and help you with your preparation for the new ‘VAT Challenge’ in the UAE We prepared for You a Comprehensive but Easy-to-Read and Understand Guide to VAT in the UAE. It covers all areas of UAE VAT Law, the Principles of UAE VAT, your Obligations, your Actions, ‘How To’ guides to VAT Compliance and VAT Registration in the UAE as Well as some Practical Examples.
Important Note: You must read this guide in conjunction with Our Latest UAE VAT Important Updates & MOF Announcements.
** Click Here for a Free Dubai VAT Services Quotation **
**THIS IS THE START OF THE VAT GUIDE – PLEASE SCROLL DOWN TO READ! **
You Have to Prepare for UAE VAT… Within a Short Time-Frame – Start NOW!
VAT ‘is coming’ to the UAE by the end of this year. But Yours and Your UAE Business’s Preparation Starts NOW. UAE Businesses, the vast majority of which will have to Register for VAT in the UAE, need to change the systems, processes, and procedures to comply with the new UAE VAT Law and VAT Regulations in the UAE which will be in force on January 1, 2018.
But from October 1, 2018 until that date UAE Businesses have to also register officially for VAT and obtain a Tax Registration Number (TRN).
Hefty fines, penalties and prison sentences await businesses which are non-compliant. So there really is no time to waste. Your business must get VAT Ready ASAP.
The Good News is that the UAE VAT System is much simpler than other countries which had adopted VAT Legislation.
Even Better News is that With the Help of the Right UAE VAT Experts, such as the FBS Emirates Group, VAT in the UAE will be Simple and Problem Free.
** Click Here for a Free Dubai VAT Services Quotation **
A Short ‘Road-Map” to UAE VAT Implementation & How to Manage it!
Early Assessment of the UAE VAT Impact is a MUST!
Conclusion: Get Moving!
The extremely short time-frame combined with the huge volume of work and long implementation lead-times makes as well as the scarcity of resources and capacity issues, not to mention significant fines for non-compliance, makes for a pressing need to start the ‘VAT Project’ as soon as possible.
Availability Issues For External and Internal resources
Availability of Internal and External Resources is a Key Issue here, especially this period that VAT implementation is a ‘national issue’ and a ‘regional – GCC – issue’ when demand for staff (poaching by competitors is always a risk), External Experts, External VAT consultants, Accountants, IT Experts, Management Consultants is at an all-time-high!
In this context, given the scarcity and limited capacity of ‘know-how’ professionals You have to Move Early to ensure you have signed up the right VAT Experts and recruited the necessary internal staff, although the time-frame is too short to allow for internal staff to be recruited, Visa process, training etc..
The significance of the Role and Importance of VAT External Consultants, their expertise and know-how as well as the fact that they will be very busy this period leading to capacity constraints must be understood EARLY to ensure you have Your VAT Consultants ‘On-Board’ from the very start.
Need for Supply Chain 3rd party ‘VAT Compliance”
Connected 3rd parties (e.g. Suppliers) Compliance Readiness is also an issue. Your suppliers must be VAT-Registered and Compliant in order to provide correct VAT documentation (including VAT invoices) in order to validate your VAT deductions.
Similarly, your customers and distributors must be VAT-Ready and VAT-Registered in order to Accept and facilitate your VAT invoices and other documentation. So get moving to liaise with suppliers, intermediaries, distributors and customers across the supply chain.
A Short “VAT System Road-map” – Planning, Design, Implementation, Operation
Plan & Design by Identifying and Assessing the Impact of VAT in each area
- Business Systems & Functions Mapping / Documentation – Assess and Record the VAT Impact for each part
- Detailed Review and Analysis of all VAT Laws and Regulations available – Get External Consultants to make sure you ‘get it right’
- Transaction category mapping and record VAT compliance requirements and ‘VAT treatment’ for each part
- Identify early on ‘Key critical issues’ and complicated / risky areas to be tackled with priority and due attention
- Accounting System ‘VAT Compatibility’ Assessment. Identify need for new system or adjustments and ‘add-ons’ to the existing system. People and procedures (manual reports) must be provided to ‘fill the gaps’.
- IT Systems Mapping & IT system design to be VAT Compliant
- HR and People Mapping – identify need for external VAT Consultants and other experts (IT etc.) or need for recruitment
- Legislation / Regulations: Review – Understand – “Map-out” – Identify “VAT decision Flags’ (VAT Technical Expertise / Advice) – Assess Business Impact – Design VAT System ‘Add-On” – Design the VAT Compliance Function
Implement the Design – ‘Built the VAT-Compliant System’
- Test the IT System AND Accounting Function-System
- “Test-Run”
- Train and Educate Users
- Compile Detailed VAT Manual
- Establish Procedures and Controls incorporating the VAT ‘element”
Operate the New VAT System
- Register for VAT
- Test Run
- Review of Your 1st Returns
- Post implementation Review and Adjustments
- On-Going Compliance, Improvements & Monitoring – Establish Long Term Relationships with Trusted VAT Experts
- Updates on New Regulations, Amendments and Changes to the Procedures and Systems
UAE VAT Implementation: Practical Tips From FBS Emirates
Accounts Department – Accounting System
The Accounts department should review ALL standard and non-standard items (e.g. gifts and allowances to employees), types and categories of transactions and make sure they understand the ‘VAT accounting treatment” and how they will be input / flagged in the accounting system.
If unclear, external advice and/or FTA clarification-enquiry should be sought. IT Flags and VAT-related transaction codes should be assigned and input in the IT / Accounting system to signify each different transaction type. Bookkeeping / Input staff should be trained to use the right codes for input for each different type of transaction AND understand why.
Sales and purchases on an Emirate level basis will have to be reported for VAT Return purposes. This is another complication to ‘factor into the equation’.
The Finance and Accounts department staff and managers should be given adequate extra remuneration to justify the extra work and responsibilities. Staff with specialized VAT expertise may be required in many cases to provide added comfort.
IT Systems
The IT department must be brief solidly in order to record all the needs and requirements as well as what exact output (reports etc.) is needed in exactly what form and format and at which frequency. Access rights also have to be addressed here for changes.
Accounting software and IT upgrade / modification will definitely be needed early on to accommodate ALL VAT changes. This is a big and obvious point…
** Click Here for a Free Dubai VAT Services Quotation **
Invoicing – Billing
Invoices should be VAT-Compliant, sequentially numbered and properly controlled. Duplicate invoices with different number will result in over-payment of VAT and negative cash flow. Establish a procedure and a control before each VAT return is submitted to review for continuous sequence of invoices and an invoice review to identify ‘double-billing’. Billing department briefing/training will be a priority as is for the entire accounting and finance department so staff understand VAT adequately so as to minimise risks.
Review and change the format of import and export invoices to show the correct value for customs clearance purposes and establish a relevant procedure and billing / accounts staff training.
Training – the BIG word!
Training is the key word here also. Management education on VAT and its impact is FIRST. Then tasks can be broken down to various departments correctly and managed effectively.
Working Capital – Negative VAT Cash Flow Impact
Working Capital provision probably has to be raised to ‘buffer’ the cash flow hit of late paying or regular clients invoiced before the VAT quarter ends but paying after that date. This will mean the company will pay-out the VAT on those invoices but … ‘hope’ to receive payment after to recover it.
So this is a negative cash flow impact you have to ‘budget for” and make sure early on finance / loan facilities are in place to ‘plug’ this hole and avoid severe cash flow problems.
Bill processing time of the sales billing department has to be speeded up to help out here as well as the efforts of the Collections – Credit Control department have to be significantly intensified in order to improve the cash flow position and reduce the Working Capital burden foreseen with the advent of VAT in the UAE.
Stock levels and re-order quantities and frequencies need to be re-assessed and optimized to reduce cash lock up caused by the negative VAT cash flow effect.
Renegotiation downwards of terms of payment and margins-pricing with suppliers is a very good idea given the impact of VAT on sales, finances and operations. The procurement / purchasing departments should get moving on this one.
** Click Here for a Free Dubai VAT Services Quotation **
Business Model
Re-design of the business model and cost-cutting especially in non-value adding processes and activities should also be undertaken. Management, Finance and Operation should be involved.
Contracts and Agreements (Legal)
Review and revise contracts with suppliers and customers to make sure the VAT element of the transaction is actually born by the customer and not the seller. Assign this review and revision exercise to your legal department and make sure new contracts consider the VAT element.
Be Careful of Fraudulent Suppliers
Establish that suppliers are officially VAT registered suppliers in the UAE. Establish a procedure to request their VAT Certificate, TRN and other documentation and carry out an online search at the FTA portal.
Pricing Strategies, Sales and Marketing
Pricing Strategies and Marketing need to be changed to account for VAT as part of price and all documentation to be clear on pricing (net of VAT or gross). Advance payments for sales would be a good thing to minimise further any bad debt / VAT risks.
** Click Here for a Free Dubai VAT Services Quotation **
VAT Consultants – VAT Tax Consultancy… Make Use of Them!
Using VAT Competent and Experienced UAE VAT Consultants – VAT Tax Consultancy is an ‘absolute must” if VAT is going to be implemented fast and adequately and VAT Compliance reinforced to avoid Risks of penalties, fines and even reputational risks.
Moreover this would reduce the pressure and stress on the Accounts staff who will have continuous support. For SME’s who are small and do not have internal accountants recruiting an external VAT professional is a ‘life or death necessity”.
It is no secret that in the UAE Market the number of Truly Competent and Experienced VAT Consultants and professionals is very small.
Your best bet is to use European origin professionals with Expert VAT knowledge, experience and practice who took the interest and time to study the UAE VAT Law and Regulations and are currently established, active and officially licensed in the UAE.
Our Group fits the bill perfectly here and we are confident clients will profit from our services, in the short-term and in the long-term.
Be Up-To-Date With VAT Developments – Stay Alert!
Another very important element in VAT Implementation for Your UAE Business, and that is where proper external VAT Consultants come in really handy, is that it is absolutely critical to get regular updates on VAT developments, changes and amendments to the UAE VAT Code or Regulations or Clarifications and Announcements from the FTA.
And most importantly to assess how practically they affect or will affect the different areas of your business.
Worthy of Note here is that Significant Clarifications and regulations as well as Tax Authority Infrastructure Milestones relating to the ‘first wave’ are still pending. Notably the VAT-Status of Free Zone Companies in the UAE. And others.
So more reason to recruit a Specialist VAT Consultant and also be on the alert so you implement the first stage of VAT implementation successfully.
Understand How Tax Reforms Work – The “Tax Reform Life-Cycle”
The truth about tax reforms: This is a fact sourced from our long experience in Tax and VAT practice that spans over 25 years relating to any tax reform anywhere in the world is this: Tax reforms come ‘in waves… First the initial Tax Reform Package is out.
Then the Tax Authorities “see’ the imperfections (also from taxpayer feedback and other difficulties). Then they issue an Amendment (‘second wave’ of Tax Reform). Expect 2 to 3 such waves!
So keep your ear to the ground and use good VAT Professionals to make sure you are ‘on top of it’, at lease for the first 2 years or until things normalise.
** Click Here for a Free Dubai VAT Services Quotation **
VAT in the UAE
Why VAT in the UAE is being introduced?
It has recently been announced that the Gulf Cooperation Council (GCC) has agreed that its member states will introduce VAT from 1 January 2018.
The aim is the generation of tax revenues to diversify the Gulf Economies away from their dependence from oil revenues and also provide top-class services and infrastructure locally in order to successfully attract and retain foreign investment.
VAT Introduction in the UAE
The UAE as a member of the GCC is introducing VAT. The Relevant VAT Law as well as the UAE VAT Tax Procedures Law have been enacted. Until the end of September 2017 all the detailed Regulations will have been issued and total clarity on UAE VAT will be established.
It has to be said though that this will be an enormous challenge for the UAE and GCC in general with a bigger effect on SME businesses as well as Free Zone Companies ‘Clarifying Regulations” for which are awaited. However the UAE adopted a very simple VAT System with a Very Low Rate (5%) and has a mature Professional Sector to Help Businesses Cope.
As a whole we believe VAT in the UAE will be implemented successfully, following a challenging initial period.
The Federal Tax Authority (FTA) is the UAE VAT Tax Authority
The Federal Tax Authority (FTA) will be responsible for setting up and maintaining records on taxpayers and on taxes paid. It will also issue necessary guidelines and clarifications to taxpayers on matters related to federal taxes and related fines.
FTA Audits
- The FTA will adopt a ‘Risk-based Approach’ to Select which Business to audit based on the ‘FTA-determined risk factors’
- The usual place of audit will be at the taxpayer’s premises with a 5-day notice or in certain cases, or at the FTA offices if the FTA decides
- FTA may in exceptional cases close the taxpayer’s place of business for up to 72 hours (e.g. tax evasion investigations)
- FTA may request original records, take samples of stock or physically mark assets to indicate they have been inspected
- The FTA may also remove records, documents and samples
What is UAE VAT?
The UAE Value Added Tax (UAE VAT) is a tax on consumption and burdens, generally, the end consumer. VAT in the UAE applies to all goods, services and transactions except basic food items, healthcare, medicines, education, local transport, bare land and residential rent and sale, investment or trading in precious metals.
There are two types of VAT Supplies (Provisions / Sales / Transactions): Taxable and Exempt (outside the scope). Taxable can be either Standard Rated or Zero Rated (0% Rated). The standard rate of tax which applies to Standard Supplies is 5% and includes most goods and services.
What Your UAE VAT Obligations?
UAE VAT Law and Regulations impose a number of obligations on UAE Businesses in order to record and collect VAT effectively. VAT Registration, VAT Filings and Returns, Maintenance of Proper Books and Records as well as Accounts – Financial Statements to show financial position and possibly Independent Audit, if one is to be safe showing to the Authorities his Books and Records are correct. So you have to get moving fast…
** Click Here for a Free Dubai VAT Services Quotation **
General Principles of UAE VAT
Input VAT
Input VAT is the VAT tax amount (std. rate 5% or 0%) added to the price by your suppliers on the purchase of goods and services of any type (except exempt supplies), when goods or services are purchased. If VAT-Registered, you can then, at the VAT Return Stage, deduct this amount of VAT paid or accounted from your output VAT tax collected from your sales..
Output VAT
Output VAT is the VAT tax amount (std. rate 5% or 0%) added to the price paid by your customers on the sale of goods and services of any type (except exempt supplies), when goods or services are sold. If VAT-Registered, you can then, at the VAT Return Stage, total up Output VAT, deduct Input VAT paid or accounted and pay the difference to the UAE VAT Authorities.
So essentially, Output VAT Minus Input VAT = Tax Owed to the UAE State
VAT – Exempt Supply
An exempt supply is a supply on which VAT is not charged and for which the related input VAT is not deductible.
VAT – Exempt Supplies are :
- Certain types of financial services like Life Insurance (not Medical Insurance), interest on loans;
- Residential properties;
- Bare land; and
- Local passenger transport
- Interest, Royalties, Dividends
Although an advantage for a VAT Exempt Business (one active in selling exempt supplies) to have lower prices so as to attract more clients there is a disadvantage here – it cannot recover input VAT on its purchases.
Same goes for Non-VAT Registered Businesses. On balance VAT Registration IS strongly recommended as even if not VAT Registered the obligations to maintain full and proper books and revenue and constantly monitor VAT Registration Thresholds (to identify registration obligation) remain in any case.
Special Categories of Exempt Persons and Entities
- Government Authorities and organisations
- Farmers and fishermen opted to be not registered for tax
- Charity and public institutions
- Member states nationals (GCC nationals) for construction of their houses for personal use
- Companies exempted due to agreements of hosting international events
VAT – Zero (0%) Rated Supply
A zero-rated supply is a VAT – taxable supply on which VAT is charged at 0% instead of the Standard 5% BUT for which the related input VAT is deductible (unlike the exempt supplies that input tax is not deductible).
Deductibility of Input VAT is important as VAT costs on purchase can be recovered by businesses at the VAT Return Stage. An Example are Real Estate Developers / Construction Companies. As this (initial built) is a 0% zero rated supply under the new VAT Law tax on expenses and purchases in the course of construction and development can be recovered. In this sense developers and construction companies will not be affected that much by the VAT Law.
Zero Rated 0% Supplies are:
- Exports of goods and services outside the GCC area;
- International transportation, and related supplies;
- Supplies of certain sea, air and land means of transportation (such as aircrafts and ships);
- Certain investment grade precious metals (e.g. gold, silver, of 99% purity);
- Newly constructed residential properties, that are supplied for the first time within 3 years of their construction ;
- Supply of certain education services, and supply of related goods and services;
- Supply of certain Healthcare services, and supply of related goods and services.
Standard Rated (5%) Supply
Quite simply All Supplies that are Not 0% – Rated Supplies or Exempt Supplies are deemed by the VAT Law to be Standard Rated Supplies. They are supplies on which VAT is charged at the standard 5% and for which the related input VAT is deductible
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Time of Supply
The time of supply for UAE VAT purposes would be the earliest of:
- Date of issue of tax invoice
- Date of receiving payment or other consideration, fully or partially
- Date of supply of goods or services
For ‘continuously supplied’ goods or services, the earliest of:
- Payment date, as stated on the invoice
- Actual payment date
(At least once in a 12 successive month period)
Monetary Value of Supply
The Value of Supply must be expressed in local currency (AED).
Important factors affecting the value of supply:
- Value of Consideration (Monetary and Non-Monetary) for the sale
- The transaction value actually paid or payable
- Fair market value
It includes:
- Import duties
- All taxes including excise duty, but not VAT
- All expenses charged by the supplier
It excludes – is reduced by:
- Price discounts
- Any ‘subject-to-tax amounts’ paid by suppliers on behalf of the client
- Government subsidy amounts
VAT Invoices
VAT invoices – Tax Invoices should be raised and must show on their ‘face’ the information below. The same should be checked on suppliers invoices received so as to substantiate and prove the deduction of VAT tax in the VAT Account.
VAT is a transaction-based system and having documentary evidence of your transactions is of paramount importance in during tax audits. A VAT Audit trail as well as a VAT audit file should be kept in order to substantiate the validity of the VAT returns and declarations during tax audits as well as down the level of individual transactions.
Essential elements of a VAT invoice:
- Invoice date and number
- The date of supply (the tax point)
- Type of supply and rate – zero-rated 0%, standard 5%, exempt
- Quantity of the goods supplied or the services rendered
- Description of the goods supplied or the services rendered
- Issuing Company’s name and address
- Issuing Company’s VAT number (TRN – Tax Registration Number)
- Customer name and address
- Customer VAT number (TRN – Tax Registration Number)
- The amount for each supply, net of VAT, line by line
- The total amount net of VAT
- The amount of VAT payable, line by line and total
Place of Supply
Transactions are subject to UAE VAT if their place of supply is in the UAE. This is important as it signifies obligation to add VAT on the invoice and account for it in the VAT Return and Pay the VAT Tax.
General Principle: The place of supply is deemed to be the place where goods are at the disposal of the customer
- Place where transport begins
- For Intra-GCC ‘Business-to Business” Sales: where transport terminates
- For Intra-GCC ‘Business-to Consumer” Sales: where transport begins, unless supplier exceeds monetary threshold.
- ‘Business-to Business” supply of oil, gas, petroleum and water via distribution system: where customer is located.
- ‘Business-to Consumer” supply of oil, gas, petroleum and water via distribution system: place of actual consumption.
Also, depending on the taxable status of the customer, i.e., whether customer is a taxable person [B2B] OR non-taxable person [B2C]
- B2B: where customer is located
- B2C: where supplier is located
- B2B: where customer is located
- B2C: where supplier is located Leased transportation: When goods are at the disposal of customer
- B2C Goods and passenger transport services: The place where transport begins
- Restaurants, hotels and catering services: at the place where sales/services are actually performed.
- Cultural, arts, sports, education and entertainment services: at the place where such activities/service are actually performed
- B2C Services related to movable goods: At the place where such services are actually performed
- Real Estate related services: The place where the real estate is located
- Telecommunication Services and services supplied electronically: at the place of actual use
Place of Supply For Goods
The place of supply is the location where goods are put at the disposal of the customer, not where goods are dispatched or transported. But if you are sending your goods to a customer located in a GCC country, the place of supply will be where the transportation terminates. That means the tax liability will be in the other GCC country.
Place of Supply For Services
The place of Supply depends on who you are selling – whether you are selling to taxable or non-taxable persons to the location of the customer and to the location services are consumed.
The place of supply when selling to taxable person will be the customer’s location. If the sale is to a non-taxable person then it will be the location your company is established.
The above apply to online transactions equally.
Examples of VAT Treatment of Different VAT Transactions – Place of Supply
You Import of goods into the UAE – The ‘Reverse Charge Rules’ apply here. Read More…
You are Exporting and dispatching goods in a normal ‘export fashion’ to a non GCC located customer in a foreign country – This is an export and zero 0% rated. So no VAT will be added on.
You are exporting Goods to a customer located in a non-GCC country, even if order is placed in UAE by customer’s agent and payment received by agent in UAE – The place of Supply is outside the UAE, no VAT will be added to the sales amount
You are exporting goods to another GCC country based client where the GCC country implemented VAT at the time of sale – Place of supply is the other GCC country and the reverse charge mechanism will be applied there.
You are exporting goods to another GCC country based client where the GCC country has not yet implemented VAT at the time of sale – Place of supply is the other GCC country and the reverse charge mechanism will be applied there.
You are selling imported goods in the Dubai local market – The place of Supply for these standard rated goods is Dubai (the UAE) so UAE VAT of 5% should be charged on top. No input tax is claimed here as the import was subject to the reverse charge.
Reverse Charge Mechanism under UAE VAT
The ‘Reverse Charge Mechanism’ is applied when importing goods outside the GCC. Customs duties will be payable, as normally, under the normal UAE tariff rates set by UAE Customs Law. Input VAT of 5% on the gross value of the import (cost + custom duties) will be accounted (not payable on import) and used by way of an accounting entry (no net VAT Tax amount obligation) in the Quarterly VAT Return as part of BOTH VAT Input AND Vat Output Tax (reverse charge to VAT Return – a charge on both sides).
In other words one the importer has to disclose the amount of VAT under both Input VAT as well as Output VAT categories of the VAT return for that quarter. In this sense, the responsibility for reporting the VAT transaction is shifted from the seller to the buyer; under the Reverse Charge Rules.
The reverse charge is the amount of VAT one would have paid on that goods or services if one had bought it in the UAE and at the same time it eliminates the impractical obligation for the overseas seller-exporter to register for VAT in the UAE.
Rules Caught in the ‘VAT Cut-off date’ – Transactions Started before 2018 and Last Until Implementation Date
- Tax is payable on all supplies and import of goods from January 1, 2018
- If the invoice had been issued or the amount paid before 1/1/2018 and the supply is made in whole after that date, the date of supply is deemed to be the ‘tax due date’. This rule also applies to Intra-GCC supplies.
- In the case of continued supplies made in part before and in part after 1/1/2018 VAT will not apply to the part performed prior 1/1/2018.
Your 4 Actions to Comply with VAT in the UAE
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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Action 1 – Register for VAT in the UAE – UAE VAT Registration Process
Register for VAT within deadlines
You need to check to see if you HAVE to register and consider also registering voluntarily to recover input VAT tax on expenses and purchases.
Make Sure You Check if you or obliged to register for VAT.
UAE VAT Registration Threshold
This is the level of Annual Turnover / Sales at and above which a UAE Business is obliged to Register for UAE VAT.
If this is above AED 375,000, the company HAS to register under UAE VAT before the 2017.
If this is between AED 187,500 & AED 375,000/, it is optional but strongly recommended to register for UAE VAT.
If it is less than AED 187,500/, the company need not register under this law.
For startups, if the ‘VAT- attracted expenses’ are more than AED 187,500/, (USD 50K) such companies have to register for UAE VAT.
How is the UAE VAT Threshold Calculated?
The total value of supplies made by a taxable person for the month in which he is applying for VAT registration and the previous eleven months.
The total value of supplies of the subsequent 30 days on which he is applying for VAT registration.
If in any of the above two options, the turnover is more than AED 375,000/- the company has to register for VAT.
The total value of exempted supplies will be disregarded from the Turnover/Sales figures. But BOTH 0% – Rated and Standard 5% Rated Supplies must be included.
Who is a Taxable person for UAE VAT?
Taxable Person means any person (individual or businesses of any form) who is conducting an economic activity for the purpose of generating income resident in the UAE or outside AND is registered or obliged to register for VAT as per the UAE VAT registration threshold in the UAE or a GCC member state.
UAE VAT Registration Deadline – for Taxable Persons
Any taxable person as per the UAE VAT law may optionally register for UAE VAT in the third quarter of 2017 but it is mandatory to register for UAE VAT and obtain a Tax Registration Number (TRN) for every UAE VAT taxable person before the end of the year 2017. This may in some circumstances reduce the compliance burden for businesses if they choose to do so.
Conditions to be Recognised as a VAT Group?
- Each person of the total persons has a place of establishment or a fixed establishment in the UAE.
- The persons are “related parties” and
- Either one person controls others, or two or more persons from the partnership control the others
- One entity cannot be part of more than one VAT group
Entities within one VAT Group are treated as one entity for UAE VAT purposes.
Supplies made between members of a VAT Group will not be considered as a transaction under UAE VAT.
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The UAE VAT Registration Process – Steps to VAT Registration
The first steps of registration AND the fee payment will be done ‘Online” to the point when a TRN (Tax Registration Number) is issued / obtained.
After that there is an ‘Offline Process” too…
‘Online’ steps to VAT registration in the UAE
Complete the online VAT Registration Form available through the Federal Tax Authority (FTA) online portal when it becomes available – expected by mid-September 2017. A Tax Registration Number (TRN) will be given after completion of the VAT Registration.
Tips: Create a new account to login > Provide name and other basic details > set new password > Verify Your email
Prepare the documents and information below as you will need it for your VAT Registration:
- Trade license
- Certificate of incorporation
- Emirates ID
- Articles of Association
- Bank Account details
- Description of business activities
- Last 12 months turnover
- Projected future turnover
- Expected values of imports and exports
- Details of any GCC supplies
- Details of Customs Authority Registration, if applicable
“Offline” Steps to VAT Registration in the UAE
This involves the issuance of the official ‘VAT Certificate”.
Documents a UAE Business needs to submit:
An application letter that is signed by the authorities of the company
A photocopy of the trading license that is valid
This stage (submission of documents) will follow only if a person or the company has already been registered online.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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Action 2 – Prepare and Submit Quarterly VAT Returns and Pay VAT Tax
The Quarterly VAT Return must be filed within 28 days from the end of the respective quarter. Pay the correct tax, on time. Also consider cash flow impact of late customer payments vs the earlier VAT payment on their invoices.
Make sure you use an appropriate Accounting software package – system. Preferably to have a VAT module. In any case manual and properly documented and tested accounting procedures and workings must be defined so you get ‘from the accounting data … to the VAT Return figures”,
Make sure your people are VAT trained adequately and ‘up to the task’ and preferably run a ‘test-run’ before going live to make sure ‘all is OK’.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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Action 3 – Maintain Proper Books, Records and Accounts
Books, Records and Accounts are of Paramount Importance for UAE VAT
First things to do, literally yesterday, to be on the safe side, are:
- Put your books, records and accounts In Order to comply with the New UAE VAT Law. You will need to Move Fast, given the tight deadlines and the significant volume of work involved, to prepare and manage 3 things: People, Systems and Procedures (you will need to pay regard to VAT invoicing requirements, IT systems compatibility, Accounting software, VAT trained employees to support, procedures, informing clients)
- Get Yourself TODAY Expert VAT Consultants – Accountants (such as our Group) whom you can officially appoint as Your “VAT Tax Agents’ to Help You Manage the Whole VAT Compliance Process to Ensure Proper UAE VAT Compliance to avoid the hefty fines, penalties and consequences related to non-compliance. On top of that your VAT Consultants will support you with their advice AND in putting your books and records in order and provide VAT Registration, VAT Returns / Filings, Bookkeeping, Accounting, Audit and other supporting professional services.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
UAE VAT – Books, Records and Accounts Obligations
Maintaining proper books of accounts and records and necessary supporting documentation is an absolute MUST. Even more, they have to be kept adequately and properly to support Your VAT Tax Calculation to the UAE VAT Authorities. The use of professionals will be seen by the VAT Authorities as supporting factor that your figures and tax calculations are correct and potentially make up for less stringent VAT tax audits.
Sales invoices, purchase invoices, bank statements, sales receipts, purchase receipts, contracts and full documentation of all other transactions entered into by the company.
Extract from the UAE VAT Law – I think this says it all: ‘Each company shall maintain proper accounting records showing its transactions and should disclose at any time the accurate financial position of the company. The Partners or shareholders should confirm that the books of accounts of the company are kept as per the provisions of this Law. Each company shall maintain its accounting books/records in its head office for a period of at least 5 (five) years from the end of the financial year of the company.”
The following must be kept for 5 years:
- Purchase – Supplier Invoices
- Purchase – Supplier Credit Notes
- Sales Invoices
- Sales Credit Notes
- Records (documentation, contracts, etc.) of all supplies, goods or services, sold or bought, imports, exports, goods disposed of NOT used for business, purchases that input VAT was not deducted
- Books and Records of the VAT Account – VAT due on VAT sales (inc.. reverse charge ‘other side’) – VAT deductible after error, correction or adjustment – VAT deductible for supplies or imports (incl. reverse charge) – VAT due after error, correction or adjustmentVAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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Action 4 – Use Expert VAT Consultants Dubai – UAE VAT Tax Consultancy
You NEED Expert Professionals for Good UAE VAT Compliance
This IS the big change in the UAE. The period when UAE businesses were not keeping accounts is over! Financial statements and Audited Accounts will be the norm! This is a positive sign that the UAE market is entering its Maturity Stage and the stage of Developed Economies. With that of course one can expect somewhat higher costs and more regulation. BUT it is a must to comply if UAE Businesses want to continue to enjoy the advantages of the lucrative UAE Market.
So move on the next level and make sure your UAE VAT compliance is a given! … and get ‘VAT Ready’ asap.
The Role of the Accounting Profession is of Paramount Importance going forward. Get Professional Help ASAP. You must ACT Now since accounting firms have a remarkable workload and business demand for UAE VAT Services and good accounting firms may close their doors soon to more client business given overcapacity / quality of work concerns.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
Appoint an Officially Registered Tax Agent to Represent You to deal with the UAE VAT Authorities
As per the UAE VAT Law a taxable person may appoint a Tax Agent to act on his behalf with regard to his tax affairs with the authority. However, the taxable person’s responsibility with the authority will remain.
The tax agent must provide all the information, documents, records, and data if the Authority ask for them.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
Who is a VAT Tax Agent?
It is a person, who is registered with the Authority in the Tax Agents Register kept by the FTA, and appointed to represent a UAE Business before the Authority and assist in the fulfilment of its VAT Tax obligations and the exercise of its associated tax rights.
Additionally a Tax Agent should have a separate a license from the Ministry of Economy or from a competent local Authority for the purpose of practicing/working as Tax Agent.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
What are the Conditions for a Tax Agent?
Tax Agent should be of good conduct and behaviour and never have been convicted of a crime, prejudicial to honour or honesty, notwithstanding that he may have been rehabilitated.
Tax Agent should hold an accredited qualification from a recognised university or institute showing his specialisation and practical experience as specified in the Executive Regulations of this Law.
Tax Agent should be medically fit to perform the duties of the profession.
Tax Agent should hold professional indemnity insurance.
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Latest UAE VAT Updates & MOF Announcements
Below are the latest important updates – items in red refer to developments / updates on specific issues after the date the update was published:
7 September 2017
The UAE VAT Law and the UAE Excise Law have been published – Executive Regulations are now expected soon…
On 27 August 2017 the following laws were published:
The UAE VAT Law (Federal Decree-Law No. (8) 0f 2017 on Value Added Tax) which sets out the framework for VAT in the UAE. The law in certain areas where further clarification and/or detail and or procedural steps are needed refers to Executive Regulations to be issued by the Federal Tax Authority / Ministry of Finance. These are expected very soon. So stay ‘tuned’ for these …. We have prepared an ‘article-by-article summary’ of the UAE VAT Law for those of you (seasoned businessmen and advisors/accountants) who may consider it useful.
The UAE Excise Tax Law (Federal Decree-Law No. (7) 0f 2017 on Excise Tax) which sets out the framework for Excise Tax Duties in the UAE concerning the taxation of deemed socially harmful goods. The law in certain areas where further clarification and/or detail and or procedural steps are needed refers to Executive Regulations to be issued by the Federal Tax Authority / Ministry of Finance. These are expected very soon. So stay ‘tuned’ for these ….We have prepared an ‘article-by-article summary’ of the UAE Excise Tax Law for those of you (seasoned businessmen and advisors/accountants) who may consider it useful.
UAE VAT and the impact on UAE Free Zone Companies
Designated Zones / Free Zones and the impact of UAE VAT: The UAE VAT Law refers to “Designated Zones” and that these zones, if they meet certain criteria and conditions, which will be specified by the Executive Regulations, will be treated as areas outside the UAE which means they will have a favourable VAT status (outside the scope, in most cases). So we will have to wait for the Executive Regulations in order to see what will be considered as “Designated Zones”.
This will clear the treatment of UAE offshore companies and UAE free zone companies (fenced & unfenced designated zones). So an action point – issue which for the time being remains answered is to clarify which free zones or offshore zones will be considered as designated ones. As well which free zones are fenced ones and which are unfenced ones. The clarification will have an impact in assessing the VAT status of these entities with finality.
A very important – positive – point as per the UAE VAT Law is that UAE authorities may grant an exception to persons that make zero rated supplies only. This will be very good, especially for uae free zone companies that make zero-rated supplies which represents the vast majority of them. Free Zone Companies selling goods and services abroad will then be exempted and it looks that is the definite intention of the UAE government… to maintain the advantages of the UAE free zone companies. However one would expect that Free Zone Companies selling goods and services in ‘Mainland UAE’ will not escape the VAT Registration and obligations under the UAE VAT Law.
UAE VAT – how it will affect UAE Offshore Companies
Another very important point is that UAE Offshore Companies / UAE International Business Companies, based on the definition of the UAE VAT Law, they do not have a Place of Residence (since as per their Memorandum cannot trade within UAE) and therefore they don’t meet the Mandatory VAT Registration criteria. This means no VAT problems or complications for them and they retain their non-resident advantages.
VAT Registration Update – When will it start?
The registration processes will open mid of September 15 and will begin first with blue-chip companies, as well as companies that produce and import excise goods, where further details will be provided in a later stage. The registration processes will be conducted through e-Services on the FTA’s website and will provide services 24 x 7, and will offer all the relevant information on the UAE taxes.
13 August 2017
UAE VAT Implementation Update – Key Points From the UAE MOF Briefing
When will the Final VAT Law and Regulations be Issued and Published?
The MOF is aiming to publish the ‘much-awaited’ UAE VAT Law (Main Law) by the End of September 2017.
The MOF also announced that Executive Regulations addressing and clarifying specific areas of The VAT Law will be issued between October 2017 and the end of the year.
Comment:
A Tight Timescale for UAE VAT Implementation
Given that the UAE VAT Law and Regulations are not out at the moment and will not be out for 7-8 weeks yet this means businesses in the UAE have 12 or so weeks to assess the full impact of the law and implement the necessary VAT-Related changes. A very short time and makes this significant task even more challenging.
Don’t wait for the Final Law and Regulations – Start the VAT Preparation NOW
Waiting and doing nothing is a recipe for failed VAT Implementation. The Good News is that there is already enough MOF announced information to allow preparation for 90% of tasks involved. In the meanwhile, or example, business flows and business transactions analysis can be undertaken as well as appointing and discussing your needs and getting advice and guidance from VAT Experts, such as FBS Emirates.
How Often Will VAT Returns be filed? In which Language?
NEW – The MOF has indicated that for some activities/sectors VAT Returns may be monthly! This would increase the administrative burden.
Also VAT Returns may be filed in Arabic and/or English – that is positive for foreign investors without knowledge of Arabic.
How to register for VAT?
In the next few days the MOF will announce the time when Online VAT Registration Portal will be active so businesses get access and can submit their VAT Registrations applications (a 15 minute process is envisaged plus+ some time to upload supporting documentation/licenses etc.).
Expected Information for Online Input on the VAT Registration Portal:
- Vat registration type: voluntary or mandatory
- Vat registration type: single or collective/grouped
- Business activities description
- Turnover in the last 12 months
- Expected turnover for the next 12 months
- The monetary value of inter-GCC supplies and acquisitions
- The monetary value of exports and imports outside of the GCC
- Details of customs registrations, if applicable
The MOF addressed Real Estate VAT Treatment
- Place of Supply will be in the country in which the real estate is located.
- Time of Supply:
For a “continuous supply of services” the time of supply will be the earlier of (i) invoice issue date or (ii) receipt date.
For prepayments it will be the time of receipt for the amount received.
Retention amounts in escrow, guarantee deposits at the time they are released and applied.
Post-dated cheques when they can be cashed.
First Supply:
First supply (i.e. both sale and lease) of residential property within three years – 0% zero-rated.
First supply of charitable buildings – 0% zero-rated.
First supply of buildings converted from non-residential to residential – 0% rated
Second or subsequent supply of residential property – VAT exempt
Lease or sale of commercial property – standard rate 5%
Lease of serviced apartments – standard rate 5%
Car parking and hotels – standard rated 5%
Supply of bare land – VAT exempt
Capital assets scheme – this will apply where VAT has been incurred on a Commercial Property (not residential) costing more than 5,000,000 AED.
The Capital Asset Scheme requires the owner of the asset to annually review the extent to which the asset is used for taxable purposes. For a building, this annual review will need to be conducted annually for the 10 years following the date from when the VAT was recovered. For smaller capital items such as computers, the annual review will need to be conducted for 5 years.
Mixed use development of commercial and residential nature. Residential (R) sale or lease is an exempt supply and input VAT is non-recoverable. Commercial (C) is standard rated and input VAT can be recovered.
The MoF has suggested that the amount of recoverable costs allowed will be:
- Costs that are directly attributable to Commercial (C)
- Plus+ a percentage of the Total non-directly attributable costs – Tnda (%=total directly attributable costs for C divided by C+R total directly attributable costs)
- Amount of VAT input tax allowed to be ‘recovered’ = Tnda X % above
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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FBS Emirates Your VAT Consultants Dubai – Dubai VAT Tax Consultancy
A Member of The FBS Kotsomitis International Group
We are VAT Consultants Dubai, Official Dubai VAT Tax Consultancy and Chartered Accountants. Fully Licensed and Reputable UAE Value Added Tax (VAT) Specialists. As VAT Consultants Dubai and Official Dubai VAT Tax Consultancy with 20+ years’ experience in the EU and 5 years in the UAE we provide ALL the services and advice required to face the UAE Value Added Tax (VAT) challenge that lies ahead.
We have an experienced Dubai VAT Team of Professionals who are expert UAE VAT Consultants Dubai and/or Professional Dubai VAT Tax Consultancy. They stand ready to support you fully to face the challenges of the introduction of VAT in the UAE and minimise the risks of lost deadlines, wrong reporting / fillings, penalties and fines. With Your Peace of Mind and Your Minimum Involvement.
We operate from our Fully-Fledged UAE Offices which are located in Al Hamra Village in RAK (Headquarters).
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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We can Help You with Our Services to make UAE VAT Simple and Minimise ‘VAT Risks’ for You!
-
- Acting as assigned Your Official UAE – Dubai VAT Tax Consultancy, responsible for liaising with the UAE – Dubai VAT Tax Authorities and Your UAE – Dubai VAT Registered Business
- Opening a UAE – Dubai VAT Tax File, Registering for Value Added Tax (VAT) in Dubai – UAE, obtaining a UAE – Dubai VAT number
- Keeping accurate accounts and books and records for You, in compliance with UAE Value Added Tax (VAT) regulations
- Preparing Financial Statements (IFRS) – financial statements give a more serious and credible image of your company
- Statutory audit – independently audited accounts provide more comfort to the UAE VAT Authorities (FTA) that your records are correct and can avoid fines
- Making VAT payments at the right time for You, avoiding fines and penalties
- Preparing and filing VAT returns for your UAE – Dubai VAT Registered Company
- Handling objections and tax disputes with the UAE – Dubai VAT Tax Authorities
- Tax and VAT Consulting – Providing You Constant Updates on UAE, VAT and Tax Law and Regulations as well as advice on actions that need to be taken
- Bottom-line, being your ‘go to’ professionals and Trusted Partners for all your UAE – Dubai VAT Tax, Accounting and Audit Need
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
UAE VAT Services Quotation: What Information We Require to Give a VAT Services Quote
We would require by email the following information. This will ensure a swift response on our side as we would estimate the size of the assignments and on your side you will get a good estimate of fees / costs involved:
FEE QUOTE FORM – VAT CONSULTANTS DUBAI
PLEASE COMPLETE PART A FULLY, ACCURATELY AND FACTUALLY THIS PART AND SEND IT TO FBS. WE WILL PREPARE YOUR QUOTATION ON THIS BASIS – PART B – AND SEND BY REPLY EMAIL
Date:
Client name and telephone number:
Capacity (Owner/Manager):
Important note: We will base our fee proposal solely on this information and to apply only to these activities so please provide as many details as possible to help us estimate volume of work. Any details surfacing later might lead to a revision of the quotation, naturally. Also we aim to give you certainty about costs so accordingly we ask for complete and valid information so we arrive at a fair & reasonable flat fee.
- General Description of activities:
- “VAT Readiness” of management and accounting department – UAE VAT Rules knowledge-level & VAT Readiness of people, systems, procedures
- What are your main concerns in relation to UAE VAT Implementation?
- VAT Services Required (Y/N) – give details & combinations accepted too:
– Arranging for the Appointment an FTA Registered ‘VAT Tax Consultancy” for your business to deal with Authorities?
– General VAT Consulting and Support to the accounting department?
– Full outsourcing of the entire bookkeeping, accounting and VAT compliance function (small businesses)?
– Full outsourcing of VAT Compliance Function only?
– VAT Registration Service?
– Review of VAT Returns and declarations?
– Assistance & Consulting for the VAT implementation?
– IFRS Financial Statements Preparation – good for VAT audit?
– Arranging for Auditing Services?
– Other – please state:
- Products and/or services description
- Customer profile and geographical location
- Supplier and associates profile and geographical location
- Distribution Channels / Method of vending goods – rendering of services
- Production facilities
- IT System and IT function overview
- Accounting department structure and capacity and knowledge level re:VAT
- Accounting transactions: Broad categories (sales invoices, returns, banking transactions, journals etc.)
- Accounting system description + software used
- Other Business Systems
- Legal: Contracts with suppliers and customers – brief description of types used
- Annual Profits:
- Annual Revenue:
- Net Assets:
- Total assets:
- No. of bank transactions per month:
- No. of sales invoices per month:
- No. of purchase / expense invoices per month:
- Locations / premises details:
- Tel.:
- Email:
- Address:
- Website:
- Manager – person responsible
- Manager – contact details:
- Name of Company:
- Type of UAE License:
- Year operations started:
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The FBS Kotsomitis International Group in Dubai and the Whole of the UAE
Our Professional Services Group, The FBS Emirates International Group, is an International and UAE Company Formation and Corporate Professional Services ‘One-Stop-Shop’ and is headed by a Top European Legal and Finance Expert, Aris Kotsomitis BSc LSE – London School of Economics (Acc & Fin), FCA, IFA, TEP and Member of The Institute of Chartered Accountants of England and Wales.
Watch our Corporate Group Video Profile As Broadcast by FOX 5 News – Indicating of Our Group’s Global Reach…
We operate from our Fully-Fledged UAE Offices which are located in Al Hamra Village in RAK (Headquarters). We provide the comfort of dealing with a reputable and Well-Established International Group with Offices in the UAE, Cyprus, Malta, Seychelles and the UK employing more than 50 highly-skilled, competent, experienced professional staff, mainly of European origin and professional associates worldwide. FBS is a full member of a number of International Professional Networks and Associations.
VAT Consultants Dubai – Dubai VAT Tax Consultancy … FBS Emirates: Your Partner in the UAE For All Your VAT Needs!
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