VAT (Value Added Tax) in UAE was enforced on 1st Jan 2018 to transform the income resource and enhance the economy. Soon after this people started seeking the advice of VAT consultants to ensure a smooth taxation process. More than 150 countries have implemented VAT in order to improve revenue UAE did the same to increase its overall revenue.
The first VAT day was full of chaos, but now businesses and people understand how it works.
However, there are a few things that businesses must know in order to ensure that VAT tasks are best practiced in their organization. Here are 4 things you should know about VAT in UAE:
VAT to Be the Same
In 2018 when VAT was introduced at 5%, many businesses feared that with time it would increase. But to their surprise, the government has kept the same. Also, UAE has one of the lowest rates in the world i.e 5%. Businesses can reclaim VAT, this concern is how it affects the buying of the consumer. Due to the VAT remaining constant, businesses especially those that belong to the service-based industry can keep competitive prices and get benefits from consumer retention.
Tourists Can Get a VAT Refund
Tourists can get a VAT refund on purchases, provided that those goods that they buy aren’t tax-free. This is a good decision that authorities have taken as the tourism industry is one of the largest contributors to the economy.
According to a survey carried out in 2017 it was estimated that about 11.3 % of the GDP came from tourism, i.e AED 154.1 billion. Although this does not directly affect the business, it can help VAT-registered businesses to better market and sell their products to tourists.
Maintaining Accounts for 5 Years
According to the law, you need to keep a record for 5 years of your accounting and bookkeeping after the end of tax time. These records include tax invoices, imports, exports, tax credits notes, outward supplies, and more.
If a tax invoice has been issued on 20th January 2018, it belongs to the Jan – Dec 2018 tax period. This means the invoice needs to be stored till 31st Dec 2023. Also, real estate should be retained for 15 Years and capital assets for 10 years for the end of the tax period.
VAT Consultancy
VAT is new, but there are still many certified tax experts in the UAE who can assist in managing your accounts and books for compliance. Taking the help of these experts is a wise choice; they are well aware of every change in tax and laws.
Our 200 + team of experts can help you keep a track of your finances and help you through the smooth process of the taxation period.
To know more about our services connect with our expert at natalyn@indianmuneem.com or mail us at our helpline info@indianmuneem.com
Indian Muneem 