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Tax Consultants & Bookkeepers in the UAE

        

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UAE rules out any VAT increase

The UAE ruled out any increase the value added tax (VAT) to be accordance with recent IMF recommendations.

“We are not concerned about the recommendations to increase the value-added tax,” the UAE’s Minister of State for Financial Affairs, Obaid Al Tayer, told Gulf News.

The International Monetary Fund had recommended a doubling of the VAT.

According to economists, before adopting any new IMF recommendation to increase the value-added tax, it is necessary to evaluate the pros and cons of the past two years since VAT was implemented and develop solutions that can make the scheme more effective to economy and society alike. Read more..

Expert VAT Opinions

A56) Should a Tax Invoice be issued for an advance payment?

The date of supply is a very important concept in VAT legislation as it dictates in which VAT period you should account for output VAT on your sales and when your customer can reclaim input VAT on his purchases. The rules are included in Articles 25 and 26 of the Decree Law and Article 19 of the Executive Regulations. To simplify the legislation a little, the timing of accounting for VAT should be the earlier of the date of the supply of the goods or services, the date of raising the tax invoice, or the date of receipt of payment. In this case, therefore, the date of supply would be when you received the payment. Read more...

FTA Press Releases

Federal Tax Authority Classifies 'Eligible Goods' for Calculating VAT as per 'Profit Margin Scheme' into 3 Categories

The Federal Tax Authority (FTA) has determined three main categories of “eligible goods” for calculating Value Added Tax (VAT) on the basis of the profit margin scheme, namely: Second-hand goods, meaning tangible moveable property that is suitable for further use as it is or after repair; Antiques, i.e. goods that are over 50 years old; and Collectors’ Items, such as stamps, coins, currency and other pieces of scientific, historical or archaeological interest.

The Authority asserted that only those goods, which had been subject to VAT before the supply in question, may be subject to the profit margin scheme. The profit margin is defined as the difference between the buying and selling price of an item, and is inclusive of taxes. Read more...

Federal Tax Authority announces Features of 'Digital Tax Stamps', Urges Cigarette Producers and Distributors to Comply with Scheme's Timeline

The Federal Tax Authority (FTA) has announced the features of the official “Digital Tax Stamps”, which are required to be placed on all cigarette packs circulated in local markets, making it possible to electronically track them from the production facility to the end consumer to ensure all Excise Taxes due have been paid.

The Authority also called on all producers and distributors of tobacco and tobacco products to comply with the timeline set for the “Marking Tobacco and Tobacco Products Scheme”, which went into effect on January 1, 2019. Read more...

Federal Tax Authority reports great success for Awareness campaign on Tax Invoice Requirements in Abu Dhabi markets

The Federal Tax Authority (FTA) has reported great interaction from retailers and consumers alike with its campaign to raise awareness about Tax Invoice requirements and urge all registered businesses to issue invoices for all transactions.

Titled “Tax Invoices: Your Right and Assurance”, the campaign was launched on January 28 to shed light on Tax Invoices and the conditions legally required to issue them, in addition to fostering greater cooperation between the Authority, the various Departments of Economic Development, and other relevant authorities and entities across the UAE. 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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