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Tax Consultants & Bookkeepers in the UAE

        

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UAE delays ban on water pipe tobacco, e-cigarettes without digital tax stamps to 2021

The Federal Tax Authority, FTA, has issued a decision to postpone the implementation of the ban on supplying, transferring, storing, and possession of water pipe tobacco - known in Arabic as 'mu'assel' - and electrically heated cigarettes in the UAE that do not carry digital tax stamps until January 1, 2021.

The ban had previously been scheduled to come into effect on June 1, 2020, in keeping with the timeline set for launching phase two of the 'Marking Tobacco and Tobacco Products Scheme', the authority said in a statement on Tuesday.

The scheme seeks to protect consumers from commercial fraud and low-quality products, limit negative impact on public health, and enhance control systems set up to combat tax evasion. Read more..

Expert VAT Opinions

A72) Do we have to issue a tax invoice before working for our clients?

VAT legislation does not allow you to raise a total invoice on the completion of a service if it spans a period of time and customers are required to make advance payments.

The Decree Law states you must account for VAT at the “date of supply”. For a service business, this is defined in the tax legislation as the earliest date the provision of services was completed or the date the payment was received or the date the tax invoice was issued.

Article 67 goes on to say that you must raise an invoice within 14 days of the date of supply. So in the case you outline above, you are required to issue your customers with a VAT invoice within 14 days of receiving the advance payment from them. Read more...

FTA Press Releases

FTA issues directive on alternative deadline to file tax returns

In light of its commitment to supporting VAT registrants and the unprecedented intensive precautionary measures undertaken by the UAE to curb the spread of the novel Coronavirus (COVID-19) imposing 24-hour restrictions on the movement of individuals and vehicles implemented in certain areas of the UAE, which coincided with deadlines for filing VAT Returns, the Federal Tax Authority (FTA) issued a directive on an exceptional basis providing an alternative date of 28 May 2020 for the deadline of submitting VAT returns and the payment of due tax for the Tax Period ended 31 March 2020, enabling Taxable Persons to meet their tax obligations without facing any difficulties.

In a press statement, the FTA confirmed that, as per the directive, VAT registrants who have monthly tax periods must submit their returns, and settle the payable tax for the tax period from 1 to 31 March, 2020, no later than Thursday, 28 May 2020. Read more..

Federal Tax Authority Announces Exceptional Extension of Tax Period for Excise Tax Registrants in Light of the 24-Hour Movement Restriction in Some Areas

The Federal Tax Authority (FTA) has reiterated its full commitment to supporting taxpayers and enabling them to fulfil their tax obligations during these exceptional times, as authorities ramp up their precautionary efforts to prevent the spread of the novel Coronavirus (COVID-19).

With that in mind, the FTA issued a decision to extend the Tax Period, which began on March 1, 2020, for businesses registered for Excise Tax for one month on an exceptional basis. The Period now covers the months of March and April 2020, and ends on April 30, 2020, allowing registered businesses sufficient time to fulfil their tax obligations before the deadline. The FTA noted that Excise Tax registrants are required to file two separate Tax Returns, one for March and one for April 2020, and settle the total amount due for the two months no later than Sunday, May 17, 2020. Read more...

Federal Tax Authority urges all businesses registered in the tax system to use its official channels and not respond to electronic messages that could be fraudulent

The Federal Tax Authority (FTA) has called on all businesses registered in the tax system to maintain the confidentiality of their information to avoid the risk of fraud. 

Urging vigilance and caution, the Authority warned that it is imperative that businesses do not disclose to any third party their private financial or accounting information, in order to avoid exposure to financial fraud that has become a global phenomenon. It added that preventing financial abuse requires the cooperation of all parties of financial transactions, especially customers. Read more...

Maintenance of Financial records under VAT

As per Decree-Law, all businesses in the UAE need to record their financial transactions and ensure that their financial records are accurate and up to date. The final responsibility and accountability to comply with VAT is on the business.

Accounting Records and Commercial Books

As per Executive Regulations of Federal Law No. (7) on Tax procedures, Accounting Records and Commercial Books shall include the following:

  • Accounting books in relation to that Business, which include records of payments and receipts, purchases and sales, revenues and expenditures, as required under any Tax Law or any other applicable law, including:
    • Balance sheet and profit and loss accounts.
    • Records of wages and salaries.
    • Records of fixed assets.
    • Inventory records and statements (including quantities and values) at the end of any relevant Tax Period and all records of stock-counts related to Inventory statements.

Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in case the authorities need to establish whether they should be registered.

Contact Finance Works to maintain your books and records and implement financial systems that are VAT ready and compliant.

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