VAT consultants in Dubai
UAE has introduced VAT in 2018. This indirect tax changed the way local companies are doing the business. Many of them are hiring VAT consultants in UAE in order to be sure they do accounting and VAT filing properly.
Even though most UAE authorities do not require to file auditing reports of financial files, it has become advisable that every company does accounting.
Keeping the books is important for your own corporate records. It helps to have a clear picture of income and expenses and plan future spendings.
VAT rules in UAE
All UAE onshore companies may be VAT liable. Even if you do UAE free zone company setup, it does not mean you are exempt from VAT.
Only UAE offshore companies - JAFZA offshore or RAK offshore - are VAT free, because they are not allowed to carry out the business locally in the UAE.
As for VAT filing, if your company is doing sales in the UAE and its local turnover reaches 375,000 AED, it should register with the Federal Tax Authority (FTA).
FTA requires any business to file reports and to pay VAT on quarterly basis. UAE VAT is 5%.
If your company becomes liable for VAT, do not forget to add that 5% to every Invoice.
The easiest way to pay your VAT is to open bank account in Dubai.
Penalties
Generally, fines and penalties in UAE are quite severe. As a business, you need to be sure you comply with FTA regulations to avoid unpleasant “surprises”.
All your Invoices should be done according to a certain standard. FTA penalty for each incorrect invoice is 5,000 AED.
However, you should be careful when registering with FTA, because not every business needs to be registered and pay VAT. In case you register incorrectly, financial penalties will be imposed on your company.
In case you liquidate your company, do not forget that you should deregister with FTA. Fine for late de-registration may reach 10,000 AED.
VAT services in Dubai offered by Emirabiz
- Monthly accounting
- Audit reports
- VAT registration
- Filing of VAT returns
- Visiting accountant - our accountant comes to your office
- Preparation of Invoices and records keeping
Emirabiz team can do business setup services in Dubai for you, which means you can get all you need from one provider.
Tax agent in UAE can answer most important VAT questions you have:
- Do free zone companies need to pay VAT?
- Can an offshore company get a tax registration number?
- How to prepare VAT reports for Federal Tax Authority?
- Do I need to pay VAT if my business is conducted abroad?
- Are my Invoices issued correctly?
We explain all these details and much more!
Get a free VAT consultation now!
FAQ about VAT in UAE
The mandatory registration threshold is 375,000 AED. It means that when your local UAE turnover reaches this number or you expect it to be reached in the nearest month, you should register for VAT.
Voluntary registration threshold is 187,500 AED. Voluntary registration is done by the businesses who are planning to claim back VAT which they paid for their corporate expenses, for example office fitout and furnishings.
VAT de-registration should be done in 2 cases:
- You closed the business
- Your sales are no longer VAT liable
If you closed the company, you should apply for VAT de-registration right away to avoid penalties for late de-registration.
In case your business model has changed and you are not supposed to pay VAT in UAE, it is better to take a qualified advice and then apply for de-registration. The process may take a few months since Federal Tax Authority will need to check if your business is really no longer VAT liable.
In UAE VAT registration number is not assigned to the business at the time formation.
Every company liable for VAT must apply for registration through Federal Tax Authority portal. Registration is usually approved within a couple of weeks. Once its approved, your unique VAT registration number will be generated and assigned to your business.
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