VAT (Value added Tax) was introduced in the UAE on 1st January 2018. It has become compulsory for every business to follow this VAT requirement law. Every organization must be attentive while filing VAT returns, as small errors may cause many losses or fines. As a company of Internal audit services in UAE, we offer versatile services, including VAT filing and VAT return.
What is VAT return filing?
The VAT system works on services and goods that are consumed in the UAE. as oil industries faced loss and their revenue started to decrease. During the same period VAT system was initiated to compensate for it, and this revenue was reinvested to develop the country’s infrastructure. Under the assigned authority of VAT law, sellers and entities who are registered collect payments within a specified time. All the payments are then filed with the Federal Tax Authority as a VAT return, which confirms that these registered entities have paid Tax.
Following, we will discuss some of the basic errors that many of us make while filing VAT returns.
- Make sure to document all zero-rated and cleared sales:
Many organizations make sure to file for all payables and receivables. But they may skip recording and document sales and rates, which are tax-exempted or zero-charged rates.
- Improper note down of all records:
Federal Tax authorities make it compulsory for all registered companies to make complete records of all payments coming inward and outward, including bank statements, salaries, and benefits offered to employees. All these transactions should be saved in documents for the last five years. Every registered entity must maintain all ledgers and books.
Delay in the VAT return
According to the UAE VAT registration process authority, it must file VAT returns before or on the day of deadlines. Registered entities must not delay or skip filing VAT returns after the due date, as this will save you from the stress of paying extra fines and penalties.
- VAT calculation mistakes:
Organizations make sure to calculate all amounts while applying correct VAT rates. Miscalculating will eventually cause you a lot of fines and penalties in the end.
Reverse charges calculations mistakes:
These charges are allocated to those companies which do import goods and services in the UAE. While importing, if companies link their customs code with their VAT account, it will be easy to file VAT. But if companies do not link their VAT number, then it will eventually become an issue while claiming VAT.
Improper planning and managing while filing VAT
VAT is the new tax system in UAE for all business firms, and it isn’t easy to follow new law clauses. For that, companies should follow proper strategies and make sure to be updated. For that, it is ideal for firms to be connected with reputed financial advisors.
If you are the one looking for information regarding In-country value (ICV) in Dubai, then we are here for you. We are giving you complete guidelines and assisting you with all your accounting and financial bookkeeping services. We ensure that our clients are not exposed to any penalties or fines which are caused due to common errors while filing VAT returns.
We ensure that all records are maintained and that there is no delay while filing VAT returns.
As one of the top accounting firms in Dubai, we are delighted to offer exclusive customized services to our clients. You were making your financial transaction smooth and safe and offering your privacy and security for all your financial documents handling.