Value Added Tax (VAT) and Registration process in Dubai, UAE

Posted by biz2books-shashi on November 25th, 2019

Value Added Tax (VAT) and its compliances:

VAT is an indirect tax imposed on the supply of certain goods and services. With the advent of VAT, it is imperative for businesses to understand registration requirements and key compliances with respect to document retention, invoicing, return filings.

Overview of VAT (Value Added Tax):

  • VAT is a consumption-based tax charged at each stage in the supply chain.
  • The end-consumer ultimately bears the cost of VAT.
  • Business collects and account for tax.
  • In effect, businesses will collect the tax on behalf of the government.

VAT Registration process:

  • A business has to register for VAT if the value of its taxable supplies and imports exceed AED 375,000 (called the “mandatory threshold limit”) during the previous twelve months.
  • A business may also voluntarily register for VAT if the value of its taxable supplies or expenses exceeds AED 187,500 during the previous twelve months. Read More Federal Tax Authority (FTA)

VAT Compliances:

Deadline for registration of VAT:

Any person required to register for tax under the provisions of the Federal Law on VAT has to make an application to the Federal Tax Authority (FTA) within 30 days of being required to register. Failure to register within this specified time limit shall attract a penalty of AED 20,000.

Tax Return Filings:

Every registered business is allocated a monthly or quarterly tax period according to its annual turnover. Each business is required to file the tax return and pay the amount of tax due before the 28th of the month following the end of the tax period allocated to the business. Failure to submit a tax return within the due date attracts a penalty of AED 1,000 for the first time and AED 2,000 in case of repetition.

It is pertinent to have a proper book-keeping service.

Contact us Our professional team, can provide assistance with VAT registration and return filings.

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Joined: October 16th, 2019
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