If you have a business in UAE, then don’t be lax in the area of VAT registration as the Value Added Tax may have an indirect impact on your business. VAT experts speaking at the VAT Clinic event at the Khaleej Times office were of the opinion that Business would have to register for VAT sooner or later. VAT in UAE is an inevitable change that requires registration by all Businesses.
The UAE Ministry of Finance has decreed that a business must register for VAT in UAE if their taxable supplies import quota exceeds the fixed registration limit of Dh375,000. On a further note, a business can also voluntarily register if they have the taxable supplies quota less than the mandatory limit, but they should exceed the voluntary registration threshold of Dh187,500.
The VAT experts are of the opinion that VAT in UAE is going to be applicable in the entire region and the businesses in UAE have to factor the applicability of the VAT law and VAT registration and its implications in the course of business.
In the expert’s point of view, a business cannot ignore the VAT compliance by giving the excuse that the turnover is not nearing the threshold and there is no need for VAT registration as the companies might have customers and vendors that come in the VAT bracket. They will ask for invoices to be in a particular format to complement their VAT systems, and this reason will force the non-VATregistered businesses to get VAT registration.
They also advised updating of the accounting systems in accordance with VAT rules and regulations to facilitate ease of transactions.
Confirming whether the current accounting system or software should be compatible with the invoicing requirements and the back end checks are a wise step in adhering to VAT regulations.The records should be maintained well in advance to prepare themselves for the day that the business will cross the threshold. Though it will not be a massive change, it prudent to be part of the practices from the start than joining in the middle.
Mahmood Bangara, vice-chairman of the Institute of Chartered Accountants of India – Dubai chapter is of the opinion that at the end of the day, businesses in the UAE have to be aware of the requirements needed to file the returns of the VAT and this should happen in a non-obtrusive way. If these points are not paid attention, it will cause severe problems in the future. He further commented that the confusion regarding the VAT compliance is not about the intricacies of the VAT but of the manner in which the business will handle the VAT compliance.
Reach our consultant at [email protected] for VAT registration or visit www.intuitconsultancy.com for more information
