What are the impacts of VAT on your business in the UAE?

The introduction of Value Added Tax (VAT) on 1 January 2018 made remarkable changes in the UAE. VAT is a consumption tax on goods and services at any stage of production where value is added. The VAT payment is based on the products’ materials that have been taxed at the previous stage.

If you are a business owner or want to start a business at a small, medium, or significant level, you need to register your business under VAT law. Registration of business for VAT depends on the income produced by the business. If the value of their taxable products exceeds AED 375,000.00 within twelve months or is expected to reach in the coming month, they must register for VAT. Businesses with taxable supplies and imports between AED 187,500 and 375,000 can voluntarily apply for VAT registration. If it is less than AED 187,500, there is no need to apply for VAT registration.

VAT services in Dubai

 

How does VAT impact businesses?

VAT holds positive impacts on business in UAE. Some of the significant upsides are discussed below.

Advancement in business:

VAT provides a compliant accounting system that allows the business to charge and recover VAT from people effectively. There is gradual migration to more advanced infrastructure from outmoded business systems to make an organization’s VAT process more efficient.

  • Enhanced in operational Efficiency:

If the business has higher operational Efficiency, then the system can work to reduce the risk of business growth. Update in infrastructure has been made with the new tax laws, skills, and improvements to build the organized business under the proper monitoring and management.

  • New Career Opportunities:

VAT opens up new career opportunities for those who know VAT-related terms. For a large number of businesses, most don’t have the time and sources to understand the complexity of VAT. So, if you are looking for VAT services in Dubai then we are here to help you to know about the new tax law in business. booksmanagers.com offer VAT services in Dubai, where our consultants understand the tax complexity and can advise you accordingly. They also give training sessions to your employees and explain business terms and transactions to their customers, keeping their eye on all the business activities which need to be registered. So, it helps to create an atmosphere of transparency in business and accountability, and economical growth.

The introduction of taxes in the UAE is part of a GCC-wide initiative to diversify regional economies. Given the overall reduction in oil prices in recent years, it has been necessary for the GCC member states to explore other revenue-raising measures and reduce dependency on hydrocarbons as the key contributor to the public purse. As a result, the GCC member states have agreed to sign unified framework agreements for the implementation of VAT and Excise taxes. Member states will also implement their own domestic legislation that will govern the introduction of these taxes.

The UAE’s citizens and residents enjoy exceptional public services, such as healthcare, roads, education, parks, and social services. The full cost of these services is paid for by the government. The introduction of VAT and Excise taxes will help the UAE diversify sources of revenue so that government departments can continue to deliver excellent public services and ensure a high quality of life for coming generations. This is also in line with a key pillar of the UAE’s Vision 2021

 

  • Betterment in Infrastructure:

VAT improves the country’s infrastructure by making it easier to do business. Infrastructure will remarkably impact the economy, which will neutralize the fact of VAT. With revenue gained from the imposition of this tax, the government predicts a reduction in the dependency on the export of oil and gas. The money from these new sources allows the government to improve the infrastructure and provide citizens with basic amenities, which will benefit both businesses and individuals.

Here, booksmanagers.com provides VAT services, and their consultants will give you information about the implication of VAT on business and how it will benefit you.

Our qualified tax advisors, tax accountants, and finance experts work on VAT advisory, implementation, tax optimization, and related training services.

  • Identify the VAT impact on your business
  • Create an outline for VAT registration obligation and apply for a VAT registration number
  • Review contractual agreements with suppliers and customers to properly map out the transaction types.
  • Update invoice templates to ensure relevant information on VAT invoices is included.
  • Review the IT and accounting system and implement necessary changes to it to ensure VAT record & reporting system is as per adopt the VAT law.  
  • Assist in structured business to avoid unnecessary cash flow, particularly in the case of intercompany transactions.
  • Ensure accounts payable received evidence input VAT paid
  • Ensure accounts receivable understands when output VAT should be paid.
  • We advise on imports and exports, application of rules, tax exemptions, VAT treatment of intra-GCC transactions.
  • Prepare and file VAT returns and claim VAT refunds.