Before UAE was a tax-free country which is why the UAE is always the favourite place for investors and businessmen. In 2018, UAE introduced VAT(Value Added Tax) which is an indirect tax on goods and services. They are charging 5% VAT at present as VAT. They imposed this tax as a means of additional income to the government in case of the oil crisis. UAE is using this additional income for the development of high-quality public services. UAE is always much aware for their infrastructure, and always want the high-quality infrastructure to remain the best among the world. Also, this VAT will help the government to reduce their dependency on oil as their revenue.
What is VAT?
VAT which is an abbreviation of Value Added Tax. VAT is applied on each product or services at the point of sale. At the end the bearers of tax is consumers. Companies have to collect the tax as per government laws which is 5 % in the aid of government. There are many VAT Consultants in Dubai who can assist you with the new VAT system for your business. Let’s see who are VAT agents/ consultants and how they can help you.
VAT Consultants UAE
As VAT is new to the country, all the businesses and companies are not much aware of or they don’t have knowledge about how to do tax procedures. The VAT Consultants are those like agents who can assist you and guide you through all the steps of tax submission. VAT Consultants are officially authorized to do the registration for VAT, file taxes or to check if any other formalities have to be done on behalf of your company.
When you hire a VAT/ Tax agents you have to make sure you choose the apt one. These Tax agents should be a registered Tax agent with relevant educational qualification from a university or institution with at least 3 or more years of experience in the field of tax services, or who have work experience in Accounting Firms in Dubai.
Communication is another important factor when it comes to doing anything in the UAE. Arabic is their national language and they use if for all legal purposes and all the documents will be issued in Arabic. So in order to do the paper works and communicate with the government authorities, you will need someone who can handle both English and Arabic easily and fluently.
Need of Hiring VAT Consultant for your business
A certified VAT agent have to meet all the standards specified by the UAE government in association with FTA. In order to get them registered with the UAE government, they have to provide all the relevant documents showing their qualification, experience etc. So when you hire a VAT Consultant, you can make your mind free of all the tax-related issues, as they can do all the things from paper works to filing on behalf of you. Nowadays most the VAT consultants are using automated accounting and tax software for calculating your tax which will be accurate and error-free and easy. The main benefit of tax agents is they can guide you throughout the taxation procedures and thus they can save you time, and save you from paying penalties as everyone knows UAE is very strict with their laws.
Who all needs VAT?
UAE is not imposing VAT on all companies. VAT is applicable to businesses only if their imports and sales exceeds AED 375000. And it’s mandatory to register those businesses for VAT. VAT paying can gain reputation as they are having a good turn over compared to others. Also, they can register by being able to claim returns. UAE government is offering you the online registration for VAT. In case if any confusions you have, then it’s always better to hire a tax agent/ consultants to handle your tax formalities on behalf of you.
Importance of VAT Registration
After the VAT registration you will get VAT certificate for your which is very important. It’s the proof that your company is registered for tax and you will be recognized under UAE government laws. It contains all the details like the name of your company, date of registration and the VAT registration number. In addition to legal proof, it can help you save from penalties, double taxation and tax exemption.