How Can Business Owners Benefit from the Tax Agent Services in UAE?

Tax is a confusing term for many business owners. Hence, according to a study, most business owners who file the tax returns choose to use an accountant or tax agent services UAE. It is also noted that many companies would like to appoint tax representatives for increased accuracy, low stress, and maximum refunds. Tax agents are preferred as they are professionals and communicate better with the tax authorities to ensure the tax returns are technically correct.

What is tax agent services UAE?

Tax is an evolving field due to the advancements in technology, and the new clarifications will become an everlasting process. Since tax agents are trained experts in the field, they are better positioned to advise business owners about the tax.

Tax agent services UAE is a professional firm or any person registered with the Federal Tax Authority (FTA) in the register of tax agents. A tax agent is a person or an agency appointed to represent another person before the FTA and fulfil his tax obligations and the associated tax rights.

Following are the reasons on how business owners can benefit from the tax agent services UAE:

1. Avoid stress by appointing a tax agent

Agree that knowing to file your returns all by yourself is a good thing. But note that you are liable for the unintentional minor errors. You may have to deal with the FTA if they come knocking and pay hefty fines, penalties or interest that creates stress. But what if you have professional tax agents by your side? Half of your tension comes down with the presence of tax agent services UAE and makes it easier for you to focus on your business. A qualified tax representative ensures your tax returns are accurate and compliant with tax laws.

2. Communicates well with FTA

The common reason that an average person face is getting confused to answer correctly with FTA. They are:

  1. Communication barriers while talking to the tax authority
  2. Unable to clear the doubts in a call to tax helpline
  3. Confusion in getting a fine waived off or couldn’t understand the reason for a fine
  4. No clarity on tax laws
  5. Doubts in getting information on tax refund claims
  6. Answering queries received from tax authorities

3. Saves time

Though it seems that preparing tax returns yourself is a secured method, filing wrong returns can bring more danger than you expect. It isn’t easy to get clarity on exempted income, claimable expenses, and many other things which keeps changing. So, spending a few hours with your tax representative ensures filing tax returns with zero errors and saves a lot of your time.

4. Meeting deadlines

Many individuals tend to keep the tax filing to the last moment. But when it is due, they forget, don’t get time to return filing or some other reason. Also, they miss out on keeping track of deadlines and delays the returns filing that leads to penalties. But a tax agent always ensures deadlines are met without delays and updated with tax notifications issued by the tax authorities.

5. Speak in the language of law

Sometimes, a normal person finds it difficult to explain the issues to tax authorities and understand what they are saying. It is because a normal person can’t get a reference from the tax laws. However, a tax agent can communicate in the language of law with the authorities, and both can understand their viewpoints in a better manner.

Verdict

Whether you have to file corporate tax or have queries regarding tax laws, hiring tax agent services UAE is a better option to avoid the possible uncertainties.

Tax Consultants Dubai- Advantages of Hiring Them

Filing taxes is definitely not an easy job. There are various complicated processes involved and business owners have to deal with huge calculations. Moreover, the tax filing rules and regulations changed over time. Hence, it is a good idea to hire professional tax consultants who can help you without making major errors.

Clarifications on tax deductions

Tax consultants are professional and can easily identify the potential tax deductions that you have to face every year. Besides, they even advise on opting for strategic investments as well as avoiding major tax liabilities in the future. Due to this reason, it is always a good idea to hire tax consultants Dubai.

An efficient tax consultant provides you with good advice along with effective methods so that you can save on your taxes. Moreover, using their guidance, you will be able to save huge on taxes, that too in a more legitimate manner. Also, you will be able to improvise the financial portfolio.

For example, hiring a tax consultant will help in identifying tax deductions and guide you so that you can save a significant amount when filing tax returns.

Help in saving time

One of the biggest problems that most people face is filing by the end of a financial year. As a result, we often end up making investment decisions quickly. After all, it takes a lot of time as well as effort to ensure that the tax return that you filed is correct.

Hiring a tax consultants Dubai with his professionalism will dig up the financial portfolio you hold, carefully check the income history along with your savings. It is an essential step before you are filing for income tax returns.

Since they will do all the legwork, you will be able to do other essential works that are necessary to perform before tax filing.

Avoid mistakes in the tax filing

The entire process of tax filing is quite hectic and time-consuming. As a result, it is common to face stress and if you don’t understand the process of the tax filing, you will automatically end up making mistakes. Let us not ignore the fact that making mistakes in tax filing can eventually force you to pay hefty fines.

Revenue services evaluate the tax return to check if there are any inaccuracies in different ways. Due to this reason, it is always a good idea to hire tax consultants Dubai as they have a professional way of understanding various tax laws.

Proper financial planning

Financial planning plays a vital role when it comes to tax planning and a tax consultant can plan everything. For example, whether you want to invest in a four-wheeler or a house, with proper expenditure as guided by the tax consultants, you will be able to save a lot of money. Moreover, you will be able to maintain the tax liabilities as well. Hence, if you are someone who wants to plan your tax expenditure, make sure to hire tax consultants Dubai.

With This Easy Method, You Can Register for VAT In the UAE Quickly

VAT stands for value-added tax. It is a tax levied based on their consumption rather than their income. It is imposed on the price of a product or service at each production stage, distribution, or sale to the end consumer.

Value-added tax, or VAT in the UAE, commenced on the 1st of January, 2018. The regulation was started as a means to provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.

Benefits of VAT Registration in UAE:

  1. Since VAT is levied on the consumption of goods and services, it ensures that the government is at the receiving end of a stable revenue generation mechanism.
  2. VAT in the UAE aims to simplify the tax collection system by making the taxes levied less complicated and repetitive.
  3. It promotes savings among consumers.
  4. VAT registration in the UAE proposed complete digitalization and computerization of the tax collection system.
  5. VAT is collected in small instalments, so the consumers have minimal burden.

Who can register for VAT in UAE?

  1. Mandatory VAT registration in UAE for businesses whose annual turnover is more than AED 375,000.
  2. Voluntary VAT registration in UAE for businesses whose annual turnover is between AED 187,500 & AED 375,000.
  3. Startups whose VAT attracted expenses are more than AED 187,500.

Step-by-step Guide For VAT Registration in UAE

1 Step: create an account on the digital portal of the Federal Tax Authority, UAE.

2 Step: upon registering for an account, commence the procedure as guided by the website. For this, you may need to prepare a few new documents in advance.

  1. Copy of Trade License
  2. Passport copy (Owner/partners)
  3. Emirates ID (Owner/partners)
  4. Memorandum of Association (MOA)
  5. Company’s Bank Account details and IBAN
  6. Details Business Turnover for the last 12 months (Balance Sheet, Audited Reports or Bank Statements)
  7. Customs Authority Registration code
  8. Company’s registered address and P.O. Box.
  9. Projected revenues and expenses for the next 30.
  10. Details of Business Activities. (Import/Export or Trading).
  11. Names of GCC countries if doing business in them.
  12. Name of Tax Group (if they want one tax group number for all the entities).

3 Step: once you submit all relevant details and documents successfully, you will receive a Tax Registration Number (TRN) upon approval by the FTA.

Voila! You’re done!

However, if this procedure seems complicated and tedious, we have the perfect solution for you.

Fastrack your VAT Registration UAE Process!

Earningo UAE is a professional CA firm that offers Tax Consultancy, Auditing & Accounting Services in Dubai, UAE.

With experts on board, get your VAT registration and other compliances fulfilled with utmost speed and meticulousness!

Looking For Professional Accounting Services in Dubai?

What does your company look for in an Accounting Firm?

FTA Certified Tax Agency?

High-quality Chartered Accountants?

Responsive and Transparent experts?

Well, you have reached the best provider of accounting services in Dubai! Earningo is an end-to-end accounting services company in Dubai. We specialise in outsource accounting and VAT compliance services. Under one roof, your company can access a multitude of services that our experts will accomplish on time and with perfection.

We don’t just want to help you with regulatory activities; we want to work on them long-term with you. Building a relationship that is loyal and establishing a sense of understanding is what makes Earningo the best choice for your brand!

“Why should I outsource my company’s accounting work to Earningo?”

That’s a brilliant and responsible question.

Why must you trust a third party to know your accounting management systems and reveal sensitive details about your revenue, expenses and taxes to them?

Here’s why you should outsource your accounting tasks to skilled providers of accounting services in Dubai:

  1. Time is money: And you want to spend it on the more important things: Focus your energy and attention on things that matter the most—your core operations. Don’t hassle on the cumbersome tasks; outsource them to the experts instead!
  2. Trust the experts: Your accounting necessities are in the best hands if you decide to trust an expert provider of accounting services in Dubai and build a long-lasting relationship with them over a long time. Their proficiency and skills will come in handy for your company!
  3. Get access to their powerful automation technology without the internal hassle: The best accounting services in Dubai were commenced because their founders believed they were competent enough to manage such tasks. Their time, money and energy are fully invested in developing their in-house technologies to ease their clients’ operations. So, why waste your energy on trying to create competencies in areas that are irrelevant to your business’s core processes.

Make good use of the company that was designed to help YOU.

“What better can Earningo do for us than my in-house CAs?”

With Earningo, you don’t just save energy; you also save yourself from the exhausting course of hiring staff for accounting.

Moreover, we help you with a multitude of accounting services in Dubai or the entirety of the UAE under just one roof!

  • Periodic bookkeeping services
  • Accounting review
  • Backlog accounting
  • Setting-up accounting systems
  • Monthly/quarterly financial reporting
  • Preparing full financial statements
  • Banking & credit card reconciliation
  • Accounts Payables & Accounts receivables
  • Payroll Management
  • Train & Supervise accountants
  • Set up accounting procedures & internal controls
  • Periodic financial reports of the business to the management (MIS)
  • PDC Management
  • Installation & training of accounting software – Tally, Quick books, Peach Tree and many more
  • Providing accounting software and training to employees

“Sounds fair. But, how do I reach out to you for work?”

Prompt and responsive, our team shall reach out to you in no more than a couple of hours!

Chat with us here .

You may also find the best accounting service in Dubai at our very own office here!

How to Apply for Tax Registration in Dubai?

One of the best ways to get your business or firm recognized by the government is to get it registered as one of the tax-paying firms. When you have completed the process of tax registration in Dubai, a government allows a goods-service provider or a business firm to collect Value Added Tax from its customers and further process it to the government.

A firm needs to pay tax, which does a business on a large basis and enjoys a large amount of profit. Tax registration is only mandated for a firm that earns above a certain amount. However, a firm that does not have enough earning is exempted from paying tax.

What is a Tax registration number?

Tax registration is a very easy process when you have all the required documents. After you have registered as a tax-paying body, the government provides you with an exclusive fifteen-digit number. This unique number is what that the government uses to recognize your proceedings and tax submission.

A person under whom the number is registered is known as a registrant. Therefore, any transaction or business made in the name of the firm must include a registration number in all kinds of documents. Also, a registrant will be liable for all kinds of tax-related issues and proceedings.

Benefits of getting tax registration completed

  1. You become a legal and trusted firm that is recognized by the government. And it may help you gain more customers.
  2. It allows you to collect value-added tax from the customers and further process it to the government.
  3. You become eligible to take the VAT credits on your tax-generated invoice.

How to apply for tax registration in Dubai

It is very easy to get yourself registered as a tax-paying firm in the UAE. You just have to follow a certain set of rules, and your company should have a yearly income that is set by the government. Thus, let us look at all the steps that you have to go through to get your firm registered.

  • The first step is to log in to the e-service of the Federal Tax Authority, and then get your firm registered.
  • After you have registered, you will have to fill a form that has eight sections, that are mandatory to be filled, which records information about your firm. It also records the type of firm, its relationships, area of business, and also, confirms the legal aspect of your firm. However, your firm must have a yearly earning of AED 375,000, to be eligible to pay taxes.
  • Then after you have properly reviewed your details, you will have to submit the form for further processing.

Once your information is cross-checked by an official of the tax authority, you will receive a tax registration Dubai number. However, it is a time-consuming process and can take up to three or four weeks.

A tax-paying firm is regarded as trustworthy by its customers. Consequently, if you are eligible, then it becomes very easy to get your company registered. Therefore, getting your company registered also allows you to do business overseas and expands your business opportunities.

 

How to File ESR Notifications in UAE?

On April 30, 2019, the UAE issued Economic Substance Regulations as part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation. Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies defines the Regulatory Authorities responsible with the administration and enforcement of the Regulations.

ESR, or Economic Substance Regulation, is one of the most talked-about topics in the UAE business world since it went into effect. Despite the passage of time, anomalies in the filing of first notifications and varied processes for different agencies put enterprises and firms in a bind. As a result, the firms want counsel from someone with a wealth of knowledge and who watches announcements/clarifications in the ESR sector. Firms and businesses that do not follow the ESR laws and regulations risk being fined and having their operations suspended.

Because of this significant change in the UAE’s business landscape to implement global level compliance, mainland, free zone, and offshore enterprises in the UAE must provide economic substance in designated relevant operations undertaken in the UAE. The first step of ESR compliance is to file an economic substance notification with the appropriate regulatory agency in the UAE within the specified timeframe, i.e. by the first ESR Report filing date, which is January 31, 2021.

Do you need to file ESR?

  • Intellectual property business
  • Banking business
  • Shipping business
  • Insurance business
  • Holding company business
  • Distribution and service centre business
  • Headquarter business
  • Lease-finance business
  • Investment fund management is a lucrative business.

It is vital to note that for accounting purposes, several corporations or consolidated groups of companies are not permitted to file a single notification. Each company must file its own application, as consolidated ones are judged invalid. To prevent such a predicament, it is necessary to get advice from reputable expert CA businesses in Dubai, provided they have prior experience offering ESR services.

Recent developments is ESR?

A new category of exemptions was created with the implementation of Resolution 57/2020. Notification must be filed along with documentary evidence to demonstrate the position in order to get the exempt status for ESR. In addition, UAE FTA will lead the charge as an authority in place of each licensee’s regulatory authority; for:

  • Licensees’ assessment of their ability to pass economic substance testing
  • imposing sanctions for non-compliance
  • Licensee appeals are heard and a decision is reached.

The following penalties have been enhanced as a result of the same resolution:

As a result of the new modification, enterprises in the distribution and service business will need to make further clarifications in their ESR filings this year. Notifications, reports, and documents that must be filed with the appropriate authorities will now be done through a portal that the UAE Ministry of Foreign Affairs has yet to launch.

Eligibility Assessment

First and foremost, the company must guarantee that the operations it performs are included in the list or subset of relevant activities. The firm can verify new rules by visiting the UAE Ministry of Finance website for confirmation or information. Only licensees and exempted licensees who engage in relevant financial activity are required to file Notification within six months of the end of that period.

After that, the company must determine whether or not they qualify for the Economic Substance Test. Firms can find the template notification and ESR report on the Ministry of Finance website before submitting for the notification.

Change Email ID on Federal Tax Authority (FTA)

The Federal Tax Authority (FTA) is a government entity responsible for administering, collecting, and enforcing federal taxes across the UAE. It helps foster an environment that drives outstanding economic development. The FTA helps keep the sturdy investment infrastructure and legislative system intact to ensure all international standards are met. It is the body responsible for ensuring that the tax system is fairly and transparently implemented. It ensures all resources are redistributed to facilitate the continued growth and development of the nation and enrichment of the people.

For any business to be registered with the FTA ensures that is it acknowledged by the government as the supplier of goods and services and is authorized to collect VAT from customers and remit the same to the government. The FTA portal is extremely easy to operate and one can easily register and maintain all records efficiently. It answers all the queries related to support, goods, refunds, VAT, etc. on the portal.

It has recently enabled the online option where one can change the login account email address that is registered with the FTA Tax Portal. The process is extremely easy and hassle-free and here are instructions on how you can update it.

What do you need to do?

1.Log in to the FTA tax portal and select –> My Accounts –> My Profile –> New Email Address –> E- Verify

2.Come Back to the same page – My Accounts –> My Profile –> New Email Address and attach a letter stating reasons for change that are duly signed and stamped.

3.The letter format that is needed is available in the guide section on the FTA website and can be easily downloaded – www.tax.gov.ae -> VAT -> Guides, References & Public Clarifications -> VAT Guide (Registration).

4.This letter must be on the official company letterhead, should include a company stamp and official contact details of the company.

5.Attach the copy of the passport of the old and new email account holder.

6.Attach the copy of the Emirates ID of the old and new email holder (if applicable)

After submitting the application, the FTA will review the request and take appropriate action within 5 business days. If the FTA requires any further details in order to process the application, the user will receive an email notification setting out the information that is needed

When the request for email change is approved, the user will receive an email notification on the newly registered email address and the email will be updated in the system.

Note: Once the new email address is updated on FTA, the user will no longer be able to login to the e-Services portal using their old email address. They will need to use the updated email address to log in to e-Services.

We are always committed to answering your questions, providing you with assistance, and hearing your comments and concerns. Contact us today for us to help you with all your queries.

Compilation of ESR Notification Deadlines for various Relevant Authorities

UAE Economic Substance Regulations (ESR) notification for all free zones is mentioned below:

Sr. No.Relevant AuthorityDeadline   Remarks
1Dubai Silicon Oasis Authority (DSOA)May 31, 2020ESR notification for DSO companies, form must be completed and emailed to lic_section@dso.ae of Dubai Silicon Oasis Authority (DSOA).
2Dubai South Free Zone (Dubai Aviation City Corporation)June 07, 2020ESR notification for Dubai South Free Zone (Dubai Aviation City Corporation). Form must be completed and emailed to economic.substance@dacc.ae of Dubai South Free Zone
3KIZAD (Industrial & Free Zone Authority, Abudhabi Ports)June 20, 2020ESR notification for Khalifa Industrial Zone Abu Dhabi (KIZAD), form must be completed and emailed to esr@adports.ae – both soft copies (MS Excel file and scanned copy) for KIZAD
4Dubai Internet City (Dubai Development Authority)June 25, 2020ESR notification for Dubai Internet City (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Internet City free zone.
5Dubai Academic City (Dubai Development Authority)June 25, 2020ESR notification for Dubai Academic City (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Academic City free zone.
6Dubai Science Park (Dubai Development Authority)June 25, 2020ESR notification for Dubai Science Park (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Science Park free zone.
7D3 (Dubai Development Authority)June 25, 2020ESR notification for D3 (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to D3 free zone.
8Dubai Knowledge Park (Dubai Development Authority)June 25, 2020ESR notification for Dubai Knowledge Park (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Knowledge Park free zone.
9Dubai Production City (Dubai Development Authority)June 25, 2020ESR notification for Dubai Production City (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Production City free zone.
10Dubai Outsource City (Dubai Development Authority)June 25, 2020ESR notification for Dubai Outsource City (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Outsource City free zone.
11Dubai Media City (Dubai Development Authority)June 25, 2020ESR notification for Dubai Media City (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Media City free zone.
12Dubai Studio City (Dubai Development Authority)June 25, 2020ESR notification for Dubai Studio City (under Dubai Development Authority). Declaration Form to be submitted at https://axs.force.com/login related to Dubai Studio City free zone.
 13Department of Economic Development (Ministry of Economy – All 7 Emirates)) June 30, 2020ESR notification for Department of Economic Development (DED) under Ministry of Economy login Portal to visit at https://msurvey.government.ae/survey/Ministry% 20of%20Economy/clf/. ESR notification for all 7 emirates can be found here.
14Dubai World Trade CentreJune 30, 2020ESR notification form for Dubai World Trade Centre (DWTC) must be complete and emailed to info@dwtcauthority.com.
15Dubai Multi Commodities CentreJune 30, 2020ESR notification for Dubai Multi Commodities Centre (DMCC) can be accessed at https://www.dmcc.ae/ for all DMCC related queries.
16Dubai International Financial CentreJune 30, 2020ESR notification for Dubai International Financial centre (DIFC) Portal can be accessed at https://www.difc.ae/ for all DIFC related queries.
17Hamriyah Free Zone AuthorityJune 30, 2020ESR notification for Hamriyah Free Zone Authority (HFZA), any query must be emailed to f&acustomerservice@hfza.ae for more details.
18Sharjah Airport International Free ZoneJune 30, 2020ESR notification for Sharjah Airport International Free Zone (SAIF) can be submitted at https://portal.saif-zone.com/AppRecordMP.aspx?bo=1165&EditMode=New&templateID=16
 19 Abudhabi Global Market June 30, 2020ESR notification for Abu Dhabi Global Market (ADGM), form must be completed, signed and emailed to economicsubstance@adgm.com.
20RAK International Corporate CentreJune 30, 2020ESR notificaiton for RAK International Corporate Centre (RAKICC) should visit https://www.rakicc.com/ Portal through registered agents.
21Ajman Free Zone AuthorityJune 30, 2020ESR notification for Ajman Free Zone Authority to be e-mailed to mahmoud.ezzat@afz.ae for more details.
22Umm al Quwain Free ZoneJune 30, 2020ESR notification related to Umm Al Quwain Free Zone (UAQFZ) should visit  http://esr.uaqftz.com/.
23Jebel Ali Free Zone AuthorityJune 30, 2020ESR notification related to Jebel Ali Free Zone Authority can be submitted through the email: Jafza.Lease-License@Jafza.ae .
24UAE Mainland Companies/LicensesJune 30, 2020UAE Mainland companies can file the ESR Notification through the following link: https://www.economy.gov.ae/english/economic-substance/pages/default.aspx

ESR Notification for Dubai Mainland companies, ESR Notification for Abu Dhabi Mainland companies, ESR Notification for Sharjah Mainland companies, ESR Notification for Ajman Mainland companies, ESR Notification for Ras Al Khaimah Mainland companies, ESR Notification for Umm Al Quwain, ESR Notification for Fujairah Mainland companies

25Sharjah Media CityJune 30, 2020ESR notification related to Sharjah Media City can be submitted through the email: esrnotification@shams.ae . You can download the form at: http://smcdocs.shams.ae/uploads/esr/shams-es-notification.xlsm?871

Penalties in case of non-compliance with ESR:

Particulars ESR Notification ESR Reporting
Failure to submit before Due dateAED 20,000 AED 50,000
Submission of Inaccurate or incorrect informationAED 50,000 AED 50,000

The penalty in case of failure to submit the notification

An administrative Penalty amounting to AED 20,000 shall be imposed on Licensee or Exempted Licensee who has failed to submit the notification or any information or document required to be filed

VAT Audit – 10 Things You Can Do To Prepare Yourself For It

It has been 3 years since VAT has been introduced in UAE for the supply of goods and services. The UAE government introduced VAT on January 1st, 2018. It has been recommended for companies to complete their VAT audit by approved tax agents in UAE.

This is because tax experts who understand the regulations set by the Federation Tax Authority (FTA) will determine tax compliance and help companies to pay the taxes. It is expected that around 90% of the VAT registrants will pay their tax returns this year.

What is Tax and Tax Year?

Tax is a mandatory fee imposed on the taxpayer by the government to collect revenue and use it for public works such as providing infrastructure and other facilities for the country. A Tax Year is twelve months covered to pay tax returns. Individuals or companies can complete their tax returns monthly, quarterly, or yearly as mentioned by the FTA during the registration.

What is Tax / VAT Auditing in UAE?

Tax or VAT auditing is a simple procedure of examining a company’s documents like sales invoices, purchase ledgers, etc, by the approved tax agents. It ensures whether the company has cleared all the liabilities and paid all the taxes properly. The VAT auditing returns must be filed by the companies in a required format within the timeframe given by the FTA.

VAT Readiness

For smooth business operations, a systematic approach is essential. UAE-based companies should evaluate and review their business activities every day. If they focus on following the below points, there won’t be any confusions in VAT auditing:

  1. Understanding –The most important thing is understanding the operational processes and business domains. It will help companies to determine the faults internally.
  2. Preparation –Internally, prepare a checklist and formulate an implementation strategy.
  3. IT Systems –Ensure that all the company’s IT systems are VAT-enabled. Add Enterprise Resource Planning (ERP), accounting, and point-of-sale systems as well. Follow all legal regulations for completing implementation to comply with the tax requirements.
  4. Current Accounting –Keep your accounting book up to date. To become VAT-liable, the time of supply is very important.
  5. VAT Accounting –Tax returns need to be submitted to the government periodically. So, make sure you have all the correct account details and VAT codes set up for generating the tax return.
  6. VAT Return –Ensure your outgoing and incoming invoices are VAT-compliant, on both sales and supply fronts.
  7. Employees –Ensure your employees know about VAT. If not, educate them. Mention VAT duties and responsibilities in the employees’ contract papers.
  8. Public Officer –Appoint a knowledgeable public officer to represent your company before the VAT authority. Make sure he is suitable and prepared for the job.
  9. VAT Guide –Maintain a policy manual for your business to cover the company’s VAT policies.
  10. Contracts –Educate your contracts regarding VAT regulations and change of policies.

Advantages of VAT Audit Preparation

With the VAT enabled IT systems in place and a public officer being appointed,

  1. The company can easily assess its VAT compliance with the FTA guidelines and regulations. This way penalties can be significantly reduced.
  2. The company can easily face the FTA audit and answer any questions if required.
  3. The company can voluntarily call for an FTA audit and avoid penalties.

Conclusion

Federal Tax Authority or FTA is a government authority that conducts the VAT audit to examine the company’s financial status. Audit assessment ensures that no faulty transactions are happening in your company. They have the full authority to ask for any financial statement of any department in the company. So, it is recommended to have knowledge about VAT audit procedures and follow the guidelines set by the authority for a company to keep operating smoothly.

What is VAT Clarification Form?

What is VAT Clarification Form?

When one thinks about the Middle East, the UAE and its trade-friendliness for industrialists native to the region and all over the world comes to everyone’s mind instantly. The UAE government has made tremendous efforts to ensure that the ease of doing business is always high here.

As an extension of its efforts to improve the infrastructure of the country, the government introduced VAT in the UAE on 1st January 2018 to aid the government’s efforts for the development sector.

To make the VAT filing and remittance process easier for the businesses, the government also provides them the facility to seek guidance on the VAT provisions’ that may be ambiguous or open to interpretation in certain cases. This is done using a VAT clarification form.

VAT Clarification Form

The UAE’s Federal Tax Authority has taken cognizance of the fact that even though the VAT system has been prevalent for more than two years now, the taxpayer would still have uncertainties regarding the provisions of the law and the interpretation of a circumstance unique to their business.

To enable clarification of such queries, the taxation authority has introduced the process of clarification via the VAT clarification form.

A VAT Clarification form must be considered to be guidance provided by the authorities regarding the query submitted and the circumstance unique to the business alone. It is not a general ruling but a specific resolution provided to the specific issue alone.

Who can submit a VAT Clarification form?

The major prerequisite to submitting a VAT Clarification form is that the person or the company raising the query must be valid taxpayers as per the prevailing laws of the country.

A registered FTA (Federal Tax Authority) agent can also take up the onus of submitting a VAT Clarification form on behalf of the taxpayer.

Points to be noted before Submitting the VAT Clarification Form

Since the document is being submitted for a time-sensitive query to a very occupied Government Authority, it is in the benefit of both the taxpayer and the authorities that certain guidelines are followed to avoid any issues

1. The applicant or the tax agent is liable to check the VAT laws and provisions in detail before submitting the clarification form
2. The taxpayer has a material interest in the matter
3. The query has not been resolved to its entirely in previous clarification attempts

The FTA requires the following to be submitted with the VAT Clarification form for addressing your query :

1. Duly filled VAT Clarification Form (A signed PDF )
2. Proof of authorization and identification is required for non-registered applicants
3. Tax Advice regarding the said matter.
4. A detailed letter, covering the facts of the matter, legal references, the applicant’s view, and the question to which the resolution is being sought from the authority.

All registered applicants must submit the filled and signed VAT clarification form via a soft copy from their registered email address only.

Failure to comply with any of the guidelines or failure to establish the uncertainty in the VAT provisions will be considered grounds for not issuing VAT Clarification by the authorities.

Timelines

By following all the mentioned guidelines and processes, the applicant is eligible to get a response from the FTA within 40 business days.

In case, the clarification form submitted is unclear or incomplete in any manner, the FTA may choose to seek additional information, and the subsequent resolution gets moved to 40 business days from the re-submission date.

Conclusion

VAT Clarification form is a valuable tool for every business, as it is an opportunity for them to present their queries in front of the authorities in a clear manner. Filling the VAT Clarification form correctly as per the guidelines is the key to obtaining a swift resolution in these matters.

For businesses who are not adept at these matters, they can seek the guidance of FTA registered Tax Agents, to make the process easier and productive.