BENEFITS OF VAT CONSULTANCY SERVICES IN UAE – BY ELEVATEBS.COM
Posted by micasin on October 21st, 2019
Value Added Tax is the most important part of any business, but everyone doesn’t have enough knowledge about it. Few businesses are facing VAT issues in UAE. VAT is one of the most important steps taken by the UAE government in order to strengthen its economy. This is first tax in this country.
Small Business has a reason to worry and is afraid of penalty from Federal Tax Authority. VAT Penalty amount is really high. These small businesses generally don’t have their own accountant or any financial professional to handle VAT issues. Elevate is a registered Tax Agent to take care of any VAT Consultancy Services in UAE.
- VAT Registration: As a Business if you have crossed the threshold of 100000 USD in last 12 months and you have not registered for VAT a penalty of AED 20,000 will be imposed .We at Elevate, help you to get registered to VAT, hassle free and smoothly. Many critical information need to be given very carefully in the VAT application to get a TRN number successfully.
- VAT Filing: We Elevate as registered TAX agent and Auditing company can do your VAT fling after verifying the VAT transactions on your income and expenses. VAT treatment on your businesses is different according to the nature of activity, location of delivery of services/product . Team Elevate is well trained and understood how to do VAT Filing correctly.
- Refund of VAT: Any Business having a VAT NO (TRN ) can get refund VAT that is paid on the business expenses .This is called Input VAT. If you have regular big amount to be refunded from FTA you need to properly maintain your books and original documents need to kept safely . VAT Refund can be handled by Team Elevate according to FTA discretion .It is a time taking process but at Elevate ensure the correct calculation of input and output VAT to avoid delay and penalty . Trading , Construction ,Manufacturing generally have big amount of VAT refunds every quarter.
- VAT Deregistration : VAT deregistration you need to go for when your business volume is less than 50,000 USD in last 12 months or you are liquidating your business . Before liquidation you need to confirm FTA that you have paid the correct amount of VAT and you don’t have any liability to FTA. The department is more vigilant at the time of Deregistration .
Tax Agent Approval Number (TAAN) 20007621.
VAT is imposing at each point of sale till it sold to end customers. The
VAT in UAE is a 5% rate for all goods and services.When any purchase is made the allowing tax paid on purchase known ‘Input Tax Credit’ or “input VAT’. And the VAT collected on sales knows as ‘Output VAT’. Input vat is adjusted with output vat so in nutshell the entire tax is paid by the consumer.
For Example
| Name |
Purchase |
Sale |
VAT |
| |
Cost |
VAT 5% |
Total |
Selling Price |
VAT 5% |
Total |
Input VAT |
Output VAT |
VAT Payable=Output VAT-Input VAT |
| Supplier |
|
|
|
500 |
25 |
525 |
|
25 |
25 |
| Manufacturer |
500 |
25 |
525 |
1000 |
50 |
1050 |
25 |
50 |
25 |
| Distributor |
1000 |
50 |
1050 |
1500 |
75 |
1575 |
50 |
75 |
25 |
| Retailer |
1500 |
75 |
1575 |
2000 |
100 |
2100 |
75 |
100 |
25 |
| Consumer |
2000 |
100 |
2100 |
|
|
|
|
|
|
- In the above example, the manufacturer pays 500 on which 5% VAT is applicable on purchase of raw Material and he sold product to distributor 1000 AED + 5% VAT. So, the Manufacturer needs to adjust Input VAT and Output Vat and balance(Output VAT –Input VAT) i.e 25 AED will be payable to FDA.
- Now, distributors sell Product to Retailer 1500 AED + %vat. Then distributor Pay net payable Vat amount to govt.
- And then retailer sell product to the end customer at 2000AED+5 % VAT.
Now, in this example, the total tax paid by all business supply chain from supplier to retailer is 100 which is the amount of VAT paid by consumer. It means the entire tax is paid by the consumer.
