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Tax Consultants & Bookkeepers in the UAE

        

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UAE has no plan to hike VAT

The UAE's Ministry of Finance on Tuesday said it raised Dh11.6 billion in value-added tax (VAT) revenues in the first eight months of 2020 and the government has no plans to raise VAT to more than five per cent.

The UAE and Saudi Arabia levied five per cent VAT from January 1, 2018 and later Bahrain also introduced it. Saudi Arabia, the region's largest economy, hiked the VAT to 15 per cent from July 1, 2020. Oman is set to become fourth country in the GCC to impose VAT from April next year.

The ministry said excise tax revenues increased 47 per cent year-on-year to Dh1.9 billion during January-August 2020 period. Read more..

Expert VAT Opinions

A65) When should a Voluntary Disclosure be submitted?

The Federal Tax Authority issued a specific Voluntary Disclosure User Guide and that offers two scenarios where a voluntary disclosure (VD) must be submitted and two where it may be submitted. You must submit a VD for a filed tax return if the calculation of payable tax is less than it should have been by Dh10,000 or more. For amounts less than this, you do not need to submit a VD and can just correct the error in the next return. However, if you have deregistered and will not be making another return, you must file a VD regardless of the amount of underpaid VAT. Read more…

FTA Press Releases

FTA Board of Directors hold 13th Meeting

The FTA Board of Directors, chaired by His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance and Chairman of the Authority’s Board of Directors, approved a number of executive decisions related to the Authority’s operational activities and organizational and administrative policies during its thirteenth meeting.

The Authority’s financial statements for the period covering the first quarter ending on March 31st, and the period ending on June 30th, 2020, were approved. This was in accordance with the international accounting standards related to reviewing the quarterly financial statements. During the virtual meeting, the Board reviewed indicators of FTA’s performance adopted by the Authority in all areas relevant to its activities during the first nine months of 2020, including registration systems, filing returns, tax refunds for groups legally qualified to recover, such as UAE nationals’ homebuilders refund, tax refunds for tourists and for foreign business visitors. Read more..

UAE Federal Tax Authority conducts workshop for 213 approved tax agents to review procedures for recovering input tax

The Federal Tax Authority has held an online virtual workshop for accredited tax agents, which addressed the timeframe for input tax recovery and redemption procedures.

During the workshop, which was held with the participation of 213 accredited tax agents and a number of Authority officials, participants' inquiries were answered, clarifying the criteria and procedures for recovering input tax incurred for specific expenses. Such expenses included those related to the COVID-19 pandemic, marketing and entertainment expenses, vehicle expenses, and events beyond taxation control.

The Authority clarified that with regard to the expenses associated with COVID-19, such as the sterilizing of workplaces and the testing of employees, are considered general expenses. Input tax is recoverable in the event that the supplies and services made by the business are themselves taxable. In the event that the business is making taxable supplies only, the input tax is fully refundable. However, in the event that the business is making taxable and tax-exempt supplies, the input tax will be partially refundable.  The FTA also indicated that input tax cannot be recovered on the expenses of testing employees’ families unless the employee bears the cost. Read more..

FTA calls on Registered Businesses to take benefit of streamlined Tax payment procedure

The Federal Tax Authority (FTA) has reported an increase in tax payments made using the Generated International Bank Account Number (GIBAN) via the UAE Fund Transfer System (UAEFTS), which allows users to pay taxes through branches of 77 banks, exchange offices, and financial firms in the UAE.

In a press statement issued today, the Authority called on businesses registered in the tax system to use their GIBAN on UAEFTS to take advantage of its many benefits, such as transferring funds online from their bank accounts to the FTA. This eliminates the need for cash and helps prevent the spread of the novel Coronavirus (COVID-19).

GIBAN is a special International Bank Account Number (IBAN) that is issued by the FTA for each tax registrant and used for transferring funds from various financial institutions in the UAE and abroad, the Federal Tax Authority explained. This method can be used to pay Value Added Tax (VAT), Excise Tax, and any administrative penalties due. 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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