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- Tax-registered businesses or “taxable persons” must submit a VAT return to the Federal Tax Authority at the end of each tax period. A VAT return shows an individual’s VAT liability by summarising the value of the purchases or supplies he has made during the mentioned period.
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August 2021. 1. Brief overview of this user guide. This guide will help you navigate the e-Services portal, and is designed to be read in conjunction with the Taxable Person Guide for VAT to file your Value-Added Tax (“VAT”) Tax Return (Form VAT201). It is intended to help you:
- What Is VAT in UAE?
- Why Is The VAT Introduced in UAE?
- What Is The VAT Rate in UAE?
- How Does VAT in UAE Work?
- VAT Registration in UAE
- Types of Supplies Under UAE VAT Law
- Input Tax Under UAE VAT
- VAT Records in UAE
- VAT Returns in UAE
- Implications of VAT on Individuals and Businesses in UAE
VAT is an indirect tax imposed on the supply of goods and services and is charged at each stage of the supply chain. The end-consumer bears the VAT while registered taxpayers collects the tax on behalf of the government.
The UAE government already delivers excellent public services, including education, healthcare, social services, public transportation, etc. The VAT introduction allows the government to diversify the income sources. Further, this huge revenue source ensures continuing the good standard of living in the UAE.
FTA announced a standard VAT rate of 5%. However, the FTA categorised a few goods and services under zero-rated supply and exempt supplies where no tax is charged.
The below example explain how the VAT system in the UAE works: A manufacturer who produces a mobile phone and sells it to a wholesaler. Then, the wholesaler adds up the profit and sells the same to a retailer. Finally, the retailer increases the selling price to add the profit and sells it to the end consumer. It is to be noted that FTA charges a V...
VAT law in UAE mandates that businesses must mandatorily obtain VAT registration if the total value of taxable supplies and imports in a year exceeds AED 375,000. Also, businesses in UAE can voluntarily obtain registration if the total value of supplies and imports or expenditures in a year exceeds AED 187,500. Businesses in UAE can complete the VA...
There are different types of supplies under VAT in UAE. The VAT rates are decided based on the nature of the goods or services. 1. Standard-rated supplies: A 5% VAT rate will be applied to these goods and services. 2. Zero-rated supplies: These supplies attract 0% VAT. However, taxpayers can claim relevant input tax. These supplies include a few ed...
Input tax means the VAT paid or due to the supply of goods or services or during an import. Businesses in UAE shall keep the invoice and import documents to claim the input tax paid on the purchases.
All businesses, registered and unregistered, must retain records such as 1. Balance sheet 2. Profit and Loss 3. Fixed assets records 4. Payroll records 5. Inventory records 6. Accounting records covering sales, purchases, payments, receipts, revenues and expenses Also, the UAE VAT- registered businesses must keep the records for five years from the...
VAT-registered businesses shall submit the VAT return and make payment of VAT liability every quarter to the FTA. The registered taxpayers must complete VAT return filing and VAT payment before the 28th day from the end of the quarter. However, the FTA may assign a different tax period to a certain group of taxable persons.
The introduction of VAT impacts both individuals and businesses in the UAE. Here's how: Implication on individuals: The cost of living can increase slightly; however, it varies depending on that person's lifestyle and spending behavior. Suppose they spend mainly on things exempted from VAT; they won't see any significant increase in the cost. Impli...
At the end of each tax period, VAT registered businesses or the ‘taxable persons’ must submit a ‘VAT return’ to Federal Tax Authority (FTA). A VAT return summarises the value of the supplies and purchases a taxable person has made during the tax period, and shows the taxable person’s VAT liability. Liability of VAT.
VAT filing in the UAE. Tax-registered businesses or “taxable persons” must submit a VAT return to the Federal Tax Authority at the end of each tax period. A VAT return shows an individual’s VAT liability by summarising the value of the purchases or supplies he has made during the mentioned period.
Taxation. Value added tax (VAT) Register for VAT. File VAT returns. How to pay VAT? VAT refund for tourists.
