How And When Should You Consider Enrolling Your Business For Vat?

Posted by Jayydaxuae on April 12th, 2021

Value Added Tax [VAT] is a tax with a nominal rate, around 5 percent, applicable for the majority of businesses and goods. To meet VAT and associated legal requirements you need to make some changes in your existing process. Your company has to ensure that your records or accounts are managed well according to the latest VAT regulations put into practice by the government.

If your business exceeds AED 375,000 with the import and supplies of services/goods subject to tax, then you need to make use of VAT registration services in UAE to enrol for VAT. According to FTA, all companies must ensure the recording of financial transitions, in addition to carrying out VAT registration requirements and updating ledgers in time to evade any penalty.

VAT registration process

To finish the registration utilizing the VAT registration services in UAE, you need to make use of the services of an accounting company that specializes in VAT registration. The experts will check your financial state of affairs and various other aspects of your business to assess eligibility for VAT registration. Then, a consultant will prepare a whole set of documentation for submission. After submitting the registration application, the consultant will take care of clarifications required by FTA, if any.

Voluntary registration

Registering willingly for VAT when your business sales turnover is less than the VAT threshold is something that you need to consider as a small business owner. It has its own advantages and drawbacks and the registration timing might also be an attribute to be taken into consideration. The benefits include reclaiming the input tax over purchases that are often lost as a monetary cost to your business. But, as an effect of the voluntary registration, your business might have to charge VAT on all the sale invoices. If your business has VAT registered customers then charging VAT would not affect your sales volume probably and has the benefit of enhanced reliability within your business community.

VAT tax returns

VAT tax returns are required to be submitted once every 3 months. You can file them online as well. There are fines for failing to present the tax return promptly and interest might be charged on your outstanding amount. There’s a chance that an assessment might be raised that needs to be paid as debt until you submit the return and fix the due amount. It is essential to submit the tax return promptly even there is an issue paying the amount in full. Failing to do so will only bring your business to the tax authority’s attention that is likely to examine and investigate if you are a persistent offender.

When your business enrols for VAT using VAT registration services in UAE it becomes accountable for charging CAT the right percentage on each sales invoice and transfer of services and goods and also preserving accurate financial accounting records of the charged tax amount that are subject to inspections.

Robert Smith is author of this article. To know more about VAT registration services in UAE visit our website: Jayydax.com