VAT services from Overture
Our comprehensive range of VAT services includes evaluation of your business for VAT impact, if required performing a detailed Gap Study to identify areas of improvement in processes and accounts to fully meet VAT requirements, provide recommendations or work with you to implement process improvements, undertake VAT accounting for you, along with resource deployment if required, support your periodic VAT reconciliation and reporting requirements.
We help you with the VAT registration process, we provide you with inputs customizing your Tax Invoice to comply with the guidelines, we review your transaction records to ensure that these are VAT compliant records, we provide you with guidance on expenses which are not eligible for input credit. Our VAT services provide inputs to structure complex transactions to be fully VAT compliant without any added cost.
We provide basic VAT services on a complementary basis to our Accounting services customers.
Value Added Tax (VAT) - Background
Value Added Tax has been implemented by the UAE w.e.f. 1st January, 2018. VAT laws require all businesses to maintain proper books of accounts, transaction records for at least 5 years. Every business eligible for registration will have to register with the Federal Tax Authority and obtain a Tax Registration Number (TRN).
VAT envisages that all purchases undertaken by any business should reflect the amount of VAT being paid along with the TRN of the supplier collecting the VAT. It also means that all sales should reflect the amount of VAT being collected along with the TRN number of the seller. A distinction is made between B2b and B2C transactions.
For businesses in the Free Zones, not all Free Zones have been notified as Designated zones. While supply of goods from designated zone to other designated zones or outside UAE is out of scope, supply of services is subject to standard rated VAT.
Maintenance of transaction records and related books of accounts for a minimum period of 5 years became mandatory with the VAT law
Business are required to net off the VAT paid against VAT collected and either pay/receive the net VAT from the Government. The above has two major implications which our VAT services help you comply with.
- Every business becomes a tax collector for the Government
- Every tax collector is subject to detailed scrutiny by the Government in case of any suspicion of tax evasion.
All the relevant laws and guidelines pertaining to VAT has been approved and in force as on 1st January, 2018.
- Registration for VAT has three options, Exempt from registration, optional registration and mandatory registration based on annual turnover values of AED. 185 K and AED. 370 K, which is common across the GCC region.
- Registration is online on FTA portal. However, adequate information is required to be available in both scenarios of registering or not registering. The information required is primarily the business financials in standard accounting format.
- Administrative penalties have already been advised for non-registration, incorrect registration or submission of incorrect information.
- Non-maintenance of accounts and records is also an offence as the law mandates maintenance of the proper accounting records.
- Ongoing compliance involves, re-engineering the entire supply chain process to ensure that VAT Input is adequately tracked and recorded, customer contracts reviewed to ensure scope for VAT charging, changes to stationary to ensure compliance to TAX invoice requirements, ongoing monitoring, reporting and support for Tax Audits if any notified.