Tax Consultants & Bookkeepers in the UAE


Latest News

Higher educational institutions can claim VAT refund

The Federal Tax Authority (FTA), has confirmed that higher educational institutions making only zero-rated and/or standard-rated supplies may recover input tax in full, except where recovery is specifically blocked.

Blocked input tax includes value-added tax (VAT) incurred on certain entertainment services, and motor vehicles that have been purchased, leased, or rented and made available for personal use, the FTA said on Sunday.

The Authority noted that higher education institutions providing exempt supplies are eligible to recover only a portion of the input tax incurred. Read more..

Expert VAT Opinions

A20) Do you have to use the Central Bank’s exchange rate for VAT invoices?

Article 69 of the VAT Decree Law states that if the supply is in a currency other than the UAE dirham, then the amount stated in the tax invoice shall be converted into dirhams according to the exchange rate approved by the Central Bank at the date of supply.

The Executive Regulations say that for each good or service you must show the following on the invoice: the unit price, the quantity or volume supplied, the rate of tax and the amount payable expressed in AED. Read more…

FTA Press Releases

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..

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..

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.