The UAE government implemented value added tax (VAT) in the country from January 1, 2018 at a standard rate of 5%, the Federal Tax Authority (FTA) is inviting applications for VAT registration. The purpose of VAT is to raise revenue to finance government spending like any other tax. VAT registration is the process of listing your business with the government as active in production and sales. Under the UAE VAT, it is mandatory for every business to present a Tax registration number (TRN) in order to claim credits of taxes paid. The said TRN can be communicated by a business to its suppliers, vendors, and customers – so that when they raise an invoice, it is tagged with a TRN –allowing businesses to claim credits.
Criteria for registering for VAT in UAE including:
A business must register mandatorily for VAT if its taxable supplies and imports exceed AED 375,000 per annum.
- It is optional for businesses whose supplies and imports exceed AED 187,500 per annum but less than AED 375,000 per annum.
- A business pays the government, the tax that it collects from its customers. At the same time, it receives a refund from the government on tax that it has paid to its suppliers.
HOW TO REGISTER
FOR VAT/DOCUMANTION REQUIRED IN UAE?
VAT registration needs to be applied for by a business if it fulfills the criteria below:
A business must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum. It is optional for businesses whose supplies and imports exceed AED 187,500 per annum.
A business house pays the government, the tax that it collects from its customers. At the same time, it receives a refund from the government on tax that it has paid to its suppliers.
Foreign businesses may also recover the VAT they incur when visiting the UAE.
Where a Person is not a resident of the State and is required to register in accordance with the provisions of the Decree-Law, the Authority shall register him with effect from the date on which he started making supplies in the State, whether or not he so notifies them of the liability to register for Tax, or from such earlier date as agreed between the Authority and the Person.
The documents required for VAT Registration in UAE include:
- Copy of trade license
- Passport copy of business owner and partners
- Copy of Emirates ID held by owner and partners
- Memorandum of Association (MOA) of the company
- Company contact details
- Bank account details
- The income statement for the last 12 months or the turnover declaration letter as provided by the FTA
- Nature of business and activities performed
VAT Reconsideration applications for Penalties.
VAT Dispute Management
The VAT planning and VAT dispute work we provide to our customers flexible and cost-effective. These emerging services with the cost-effective measures are not easy to be found. Our clients realize this thing and that’s why they come towards us to attain VAT planning, VAT dispute and accounting services. Our services are comprised of various benefits along with the excellent features that include dedicated accountants and VAT consultants For any queries on VAT or tax consultation for companies in the UAE, Level is a leading Tax, accounting and audit firm in UAE can help you with your accounting and VAT services.
Any person can apply to FTA to reconsider any decision within 20 business days from notification of the decision. The applicant must provide reasons to appeal a decision. FTA will review the decision and issue a new one within 20 business days from receipt of the application and must inform the applicant within 5 business days of issuing the decision.
The first step in the process is to request the FTA to review its decision. The company must file the reconsideration form within 20 business days from the date of the original FTA decision was made. The FTA will also have to respond to the reconsideration application and provide a revised decision within 20 business days.
Tax Disputes Resolution Committee
In case a taxable person is not satisfied with the revised decision, he can use his right to object to the Tax Disputes Resolution Committee. The application must be submitted in 20 business days from the revised decision of FTA. The Tax Disputes Resolution Committee then responds to the application within 20 business days.
Federal Court Litigation
If the taxable person is not satisfied with the Tax Disputes Resolution Committee decision, then it has the right to appeal in the competent court. The court is where the decision remains unchallenged. The appeal has to be made within 20 business days after the Tax Disputes Resolution Committee decision is conveyed. In late 2018, the FTA announced that they will no longer entertain reconsideration applications in any language other than Arabic. Now, application for reconsideration and all supporting documents must be in Arabic.
All the liabilities towards FTA including unpaid Taxes or penalties must be settled before submitting a reconsideration form. Legal knowledge is critical in these applications, so it is recommended for business owners to work with specialists or consultants to help you through the process. The VAT advisors at Level in dealing with the FTA regarding Reconsiderations and appeals. We can help you bridge the language barrier and file a reconsideration to the authority.
The Reconsideration Services we provide to our customers flexible and cost-effective as the model is based on various factors making them very lucrative for our clients.
VAT Return Filing with FTA
A taxable person is responsible to submit VAT return in the UAE in the prescribed format given by the FTA. The VAT return discloses the Tax amount due (or refundable as the case may be) for a Tax Period. One must disclose the total output tax payable as well as the input credit available against such Output separately. Excess of Output Tax over and above the Input Tax for a tax period is the amount of Tax Liability to be paid. The content of the VAT Return Form is display below:
The VAT return form must be submitted to the FTA within 28 days of the completion of the tax period and the VAT liability must also be settled within this time frame.
Tax Agency Service
What is Tax Agent?
A tax agent is any natural person registered with the FTA in the register of tax agents, who is appointed on behalf of another person to represent him before the FTA and assist him in the fulfilment of his tax obligations and the exercise of his associated tax rights.
Notably, there are certain minimum requirements which a tax agent must meet before the FTA approves that person’s application as a tax agent.
According to the FTA (Federal Law No. 7-of-2017 on Tax Procedure, ‘A Person may appoint an FTA Tax Agent to act in his name and on his behalf with regard to his Tax affairs before the Authority, without prejudice to that Person’s responsibility before the Authority.’
Being your Tax Agent in UAE, Level will be responsible to provide all the records, information, documents, and financial data to the Federal Tax Authority (FTA) if requested to submit on behalf of you. We will act as a Tax Agent on behalf of you to handle all Tax affairs with the FTA.
As a tax agent, we are providing the following services:
- VAT Registration, VAT Person Registration, VAT Group Registration.
- Preparing, submitting and Filing VAT Returns on behalf of you.
- To maintain all the Financial records related to Tax transactions.
- Liaise with FTA on your Tax related matters.
- Represent you in front of FTA if there will be any query or clarification required.
- Facilitate and Assist FTA on your behalf if Tax Audit or Tax Inspection is conducted.
- Arrange or prepare all the documents which are in line with the VAT for the FTA during the Tax audit.
- To submit request for reconsideration or VAT Voluntary Disclosure submission on the decisions made by the FTA.
- To proceed with de-registration process on your behalf if required.
The Tax Agency Services we provide to our customers flexible and cost-effective. With a team of tax agents and qualified tax professional, we at Level are ready to represent the client and provide them with the best possible service at a very competitive price.