At the end of one fruitful year of implementation of VAT, let’s go back and see how VAT affected the people in UAE. VAT or Value Added Tax is the tax levied on the consumption of goods and services at each point of production. The end users finally bear the charge and businesses gather the same on behalf of the government.
VAT came into effect on Jan 1st, 2018 in the UAE and charged 5% for the goods and services. VAT helped the government to reduce the emphasis on oil as the oil price is fluctuating and helped improve the quality of public services from a new source of income. VAT only affects the end customers. However, on certain supplies, no VAT is charged. There is no cost for business but organizations proceeding with the tight working edges need to take thought of the reality. They must be careful on business records which are seen by the FTA and demonstrate that the exchanges are reasonable and pay additional if they are owed to.
There are 30 guides and 50 newsletters on VAT procedures and legislation published, 136 general and specific public clarifications issued on FTA site, and businesses were given maximum opportunity to clarify the minute aspects of VAT.
The Federal Tax Authority (FTA) on Saturday reported that the number of organizations enrolled for VAT surpassed 296,000 while 650,000 VAT returns were submitted in 2018. Focussing on the initial year impact of VAT, over 7,200 retail shops participated in the tourist refund scheme, along with over 5000 transactions processed on an average per day. Khalid Ali Al Bustani, director-general of FTA, said the full implementation of the electronic paperless tax system has been a major milestone for the UAE. He credited the high compliance rate of submitting tax returns and paying due taxes to the simplest procedures.
At the end of each tax period, businesses or taxable persons must submit a VAT return to the FTA. In 2019, Al Bustani seeks after real enhancement in tax compliance rates, advance registration among taxable businesses and battle tax evasion. For the businesses which are not enlisted, there are auditors like us helping with VAT in UAE and don’t make your VAT enrollments excessively muddled. For those who fail to do the same are applicable to heavy fine charges.