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VAT Consultancy Services

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What is VAT?

Value Added Tax (VAT) is an indirect tax system introduced in more than 160 countries around the world. Since its adoption in the UAE in 2018, many businesses are struggling to cope with its complexities. VAT services in Dubai are collected at all stages of the supply chain, and each actor involved is responsible for ensuring VAT compliance. VAT registered companies only collect and pay VAT on behalf of the government and the final VAT impact is borne by the end consumer. Simple as this may seem, complex scenarios arise which require expert advice and opinion in the UAE to ensure compliance.

Given the heavy penalties and sanctions that non-compliance entails, every business seeks the best VAT consultancy services in Dubai. Bestax Chartered Accountants have assembled a team of top tax experts with years of experience who can provide you with top-notch VAT advisory services in the UAE while you focus on growing your business.

VAT registration requirements:

Voluntary registration: Any business or individual that has exceeded the voluntary registration threshold of AED 187,500 in the last 12 months or expects to exceed this threshold in the next 30 days is eligible to voluntarily register for VAT.

Mandatory registration: Any company or individual exceeding the mandatory threshold of AED 375 000 must register for VAT within 20 working days of exceeding this threshold, failing which a penalty of AED 10 000 for late VAT registration will apply.

As mentioned above, the law sets out the criteria for compulsory and voluntary VAT registration for businesses. However, in some cases, it may be appropriate for a company to register for VAT registration services in Dubai at an early stage, even if it does not meet the criteria for compulsory registration. Once registered, such businesses can claim input tax on all taxable expenses and purchases, thereby reducing their costs by 5%. In addition, being a VAT registered also increases your credibility with your clients and creates a positive image on the market.

The procedure for registering a VAT consultancy firm requires the applicant to submit a set of documents and information (in English and Arabic) to the Federal Tax Authority. If these documents are incomplete or the information provided is incorrect, this can significantly delay the registration process.

At Bestax Chartered Accountants, we assist our clients with VAT registration services in the UAE as follows:

  • Compliance assessment.
  • Preparation of a checklist of required documents and information.
  • Processing of the registration application after a thorough examination by our tax experts.
  • Assistance with follow-up issues until the FTA issues the TRN.

By taking these precautions, we ensure that your VAT consultancy registration is submitted in the best possible way so that approval is not delayed beyond a reasonable time.

VAT implementation:

VAT implementation serves as a foundation stone for your business before it starts conducting financial transactions. Although it may seem very simple, a small discrepancy or misunderstanding of the VAT decree-law can lead to major errors in VAT calculation, resulting in heavy fines and penalties from the authority.

  • Our top tax experts in the UAE understand the importance of implementing VAT in your business and provide the following services in this regard:
  • Detailed analysis of your business model
  • Review of existing contracts and recommendations for changes
  • Assess the applicability of VAT to your business transactions.
  • Assistance in implementing VAT-compliant accounting software
  • Advising on the accounting requirements imposed by the FTA
  • Identification of business-specific tax risks
  • Filing VAT returns

Depending on your company’s annual turnover, you may be required to submit periodic VAT returns to the FTA as follows:

  • Monthly VAT filing: Turnover above AED 150 million
  • Quarterly VAT return filing: Turnover below AED 150 million

However, the FTA may, at its discretion, set different VAT periods for different businesses.

Taxable businesses are required to submit VAT returns to the FTA periodically and usually within 28 days of the end of the relevant VAT period. Failure to meet the deadlines may result in additional VAT penalties for late filing and payment of VAT returns. These returns must accurately calculate the VAT figures relating to standard, zero-rated, exempt, reverse charge, export, and import transactions.

Our tax experts and qualified chartered accountants provide our clients with the following VAT return services in the UAE:

  • Ensuring that a well-maintained accounting system is in place
  • Review of all business transactions and relevant VAT laws
  • Reviewing all processes and recommending any necessary changes
  • Reviewing documentation to ensure compliance with VAT requirements e.g. contracts, invoices, etc.
  • Calculated figures are consistent with supporting documents.
  • Verification of compliance of input VAT claims
  • Maximum possible input tax claim
  • Early submission of VAT returns
  • Assistance with subsequent FTA requests related to VAT returns submitted.

VAT-compliant accounting

The dynamics of accounting have changed significantly since the introduction of the UAE. Businesses are now required to keep VAT-related records for at least 5 years as required by the FTA. As VAT is a self-assessment tax, the FTA obliges businesses to keep their accounting records in full compliance and easily accessible to any audit by the authorities.

Our team of qualified chartered accountants, who have a strong knowledge of VAT and accounting services, ensure that our clients’ books are always up to date and that they are reconciled with the VAT returns submitted.

Our team of top accountants and tax experts in the UAE assist clients as follows;

  • Preparation and review of VAT-compliant accounting records
  • Reconciliation of internal accounting records with submitted VAT returns
  • Maintaining accounting records in accordance with FTA requirements.
  • Weekly and monthly checks to ensure up-to-date records.
  • On-site visits for physical verification of documents
  • Advice and assistance to organizations submitting supporting documents under the FTA.
  • Advice on necessary changes
  • VAT refunds

Where businesses have more input VAT than output VAT, their net VAT position is refundable from the government. In addition, businesses that purchase taxable goods or services domestically and zero-rate exports are also refunded VAT by the government. In order to claim such refunds, the FTA has set up a gateway to submit VAT refund applications together with a set of supporting documents and related information.

Bestax Chartered Accountants provides the following VAT refund services in the UAE:

  • Preparation and processing of VAT refund claims
  • Ensuring the completeness of the application package in accordance with FTA requirements.
  • Submission of the VAT refund application
  • Assisting with subsequent FTA claims up to the VAT refund approval stage.

We ensure that the application package is complete and meets the FTA’s specific requirements before processing the VAT refund application to avoid unnecessary delays or rejections by the authority.

Dubai Expo 2020 VAT Refund

The UAE government has recently issued Cabinet Decision No. 1 2020 on “Refund of VAT paid on goods and services related to Expo 2020 in Dubai”. Under this scheme, participating companies can recover VAT paid on the import or supply of certain goods and services, even if these companies are not registered for VAT in the UAE.  The Law sets out certain conditions, criteria, and procedures for claiming VAT refunds for Dubai Expo 2020 participants.

Our top tax specialists in the UAE provide the following services in this area:

  • Assessing eligibility criteria
  • Preparation of the necessary documentation
  • Application for a Certificate of Entitlement
  • Submission of VAT refund application
  • Assistance with follow-up issues until the refund is approved and credited to your bank account.
  • VAT exclusion from the register

The FTA has set a certain condition when companies need to cancel their tax registration number. A company must apply for cancellation of its VAT registration in the following cases:

  • If the company’s taxable transactions in the last 12 months are below the voluntary threshold of AED 187 500, it must apply for deregistration within 20 days of such an event. If the company ceases to make taxable supplies.
  • If a company fails to submit a timely application for cancellation of VAT registration, it may be subject to a penalty of AED 1,000 for each month of delay.

Our best tax advisors in Dubai understand the importance of VAT deregistration and assist clients with the following services to ensure a smooth and speedy VAT deregistration filing in accordance with FTA requirements.

  • Assessment by a VAT consultancy firm in Dubai Deregistration Criteria
  • Submission of the VAT deregistration application
  • Assistance in the provision of VAT advisory services following inquiries received by the FTA regarding VAT deregistration
  • Review of VAT penalties

There may be unfortunate cases where the FCA may impose large fines and penalties on a firm for various reasons, such as late payment of tax, late submission of a VAT advice return, late registration, or application for cancellation of VAT advice, or non-compliance with other FCA rules. Any person or business receiving such penalties may request a VAT review within 20 working days of the decision. The Authority will consider the application and may cancel the penalties if the firm proves that they are justified. Get more information on VAT penalties and sanctions.

What Bestax Chartered Accountants do?

  • We carry out an in-depth analysis of each case
  • We help the client to prepare a review application
  • We provide guidance on any supporting documents to support the application for review.
  • We make sure that no supporting points are left unaccounted for before submitting the VAT review application.
  • Contact the authority on the status of the application.
  • Assisting with any further FTA inquiries in relation to the application.

FTA VAT audit

Under the VAT Decree-Law, the FTA can carry out a tax audit of a company with 5 days’ notice.  By carrying out a VAT advisory audit, the FTA ensures that companies comply with VAT laws and avoid tax evasion. If non-compliance or tax evasion is detected, the FTA may impose severe penalties depending on the type of non-compliance. Penalties can also be imposed for failure to provide documents and records requested by the FTA.

The FTA has already initiated a tax audit process, in particular with regard to returns filed or not filed by companies from January 2018 to date. The FTA will check the accuracy of the accounting documents as well as the filing of tax returns. Businesses will have to be prepared to fully substantiate all their figures, accounts, payments, invoices, records, and various other aspects of VAT advisory compliance which will come under increased scrutiny by the authorities.

Given the risks associated with an FTA tax audit, it is imperative that a business scrutinizes its books and VAT returns. This will ensure adequate preparation before receiving formal notification of the audit and sufficient time to make the necessary corrections. Please note that under the VAT Consultation Act, penalties are significantly reduced if errors are identified and corrected by the company itself before the FTA audit. We, therefore, encourage businesses to carry out VAT advice and accounting system health checks in advance to avoid major inconvenience during an FTA tax audit.

In light of the above concerns, every organization strives to prepare for a tax audit well in advance. To avoid any penalties after receiving an official FTA notice, make sure your company’s financial matters are taken care of by the best tax experts in the UAE – working with Bestax Chartered Accountants today can save you a lot of time.

We encourage businesses to carry out VAT advisory health checks at least twice a year to ensure compliance with VAT advisory regulations.

Bestax Chartered Accountants provide assistance before and after FTA VAT audits:

  • Detailed VAT Health Checks
  • Assess, identify, and correct errors
  • Review of accounting records
  • Representation before FTA auditors on behalf of the client.
  • Timely submission of required documents and information to FTA

Voluntary VAT disclosure

If, due to an error, the amount of tax payable is AED 10 000 less than required, the company must submit a voluntary disclosure to the FTA within 20 working days of discovering the error. Voluntary disclosure is a useful tool for correcting material errors in VAT advice returns. Although there are penalties associated with voluntary disclosures, they are significantly lower compared to the penalties when such errors are detected by the FTA.

We provide a VAT advisory health check service to our clients and if our assessment identifies errors that require the submission of voluntary disclosure, we will assist our clients as set out below:

  • Analyze and identify the errors
  • Assess the potential penalties that may arise from filing or not filing a voluntary disclosure.
  • Prepare the necessary information for voluntary disclosure
  • Submitting a voluntary disclosure
  • Assist with further FTA inquiries until a voluntary disclosure of VAT advice is approved.

Bestax Chartered Accountants is a one-stop solution for all your VAT services including VAT registration services, VAT return filing services, VAT advisory services, VAT consultancy services, VAT advisory services, VAT penalty review services, VAT pre-audit services, and all other compliance services related to VAT consultancy in the UAE.

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