Before
the declaration of Tax Procedures, there has been extended researches and
studies on the part of the government, making assured that everything will be
relatively easy for everyone in the country.
History of Tax System in UAE:
Since
the milestone Federal Law Number 7 of 2017 regarding Tax Systems was announced
by Sheikh Khalifa Bin Zayed Al Nahyan in June of the year 2017, it laid down
the bases of the tax policies that would soon be administered in the United
Arab Emirates starting 1 January 2018. This will mark the United Arab Emirates
and Saudi Arabia as the first countries that are part of the Gulf Cooperation
Council that will implement Value added tax.
Arriving
mid of September, the start of the registration will happen for all firms that
fall under the minimum annual revenue of AED 375,000. There are approximately
350,000 businesses that are expected to register under this new regime.
Registration of VAT: UAE Federal Tax Authority
The
registration will be done on the Federal Tax Authority website. The
well-established and economically sound companies will be first-in-line in the
registration along with those companies that are producing and importing goods
that will have the excise tax on—tobacco, energy drinks, and carbonated drinks.
Implementation of VAT:
There
have been a lot of questions originating from the business world regarding the
implementation of the VAT registration
in Dubai, and the Ministry of Finance’s website has been updating
its VAT page for recent information to satisfy the inquiries of UAE citizens.
The
federal tax authority has started an online system on an official website that
will be providing a facility for businesses that exceed compulsory and
voluntary value-added tax registration thresholds.
Business
means it is basically involved and ongoing in any form of the following such as
industrial, commercial, professional, trade, etc.
VAT Returns/ Filling of VAT:
Value-added
tax revenues must be filed by the business within 28 days from the close of the
tax period (according to the methods identified clearly in the value-added tax
legislation) with the federal tax authority on a regular basis—this still
depends on the FTA’s decision; it can be quarterly or for a shorter time.
Moreover, there will be e-services online that will be given by the government,
and tax returns shall be filed there.
Moreover,
a business can select to register for value-added tax regardless if they do not
meet the minimum annual revenue, but they go exceeding the voluntary basis that
is AED 187,500.
Additionally,
on the other hand, if the minimum amount for voluntary registration is
surpassed by a business’s expenditures, they can register voluntarily as well.
New organizations (which are beginning to develop and without turnovers) are
encouraged in this kind of opportunity, enabling them to register for
value-added tax.
Taxable supplies:
To
understand further, if you are bound to be registered, the definition is as
follows. If there is a supply of products or services that are done in the
United Arab Emirates and have the probability of being taxed at either 5
percent or 0 percent, this is a taxable supply. Even imports are taken into
concern as taxable supplies if they are made in the United Arab Emirates.
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