804, Sapphire Tower , Port Saeed , Deira , Dubai , UAE info@icbtax.com

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  • 804, Sapphire Tower , Port Saeed , Deira , Dubai , UAE
  • info@icbtax.com
  • +971 54 581 0022

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VAT Compliances

Know your VAT registration and compliances inside and out.

To have a successful VAT registration in the UAE, VAT compliance is required. Firms must follow all applicable requirements while registering for VAT in the UAE. ICB ensures our assurance of credibility and trust in a similar way. Our expertise is in providing consistent counsel on VAT. We promise to be effective.

What is VAT compliance?

VAT compliance is a necessity to have efficient VAT registration in the UAE. When registering for VAT in UAE, firms must comply with all applicable regulations. It is optional for a firm to register under UAE VAT legislation if its annual turnover is between AED 187,500 and AED 375,000, according to VAT laws. Furthermore, if the amount is less than AED 187,500, the corporation is exempt from the law’s requirements. Startups must register with the UAE VAT law if their VAT-attracted costs exceed AED 187,500 (USD $50,000).

ICB assists our customers in evaluating the checklist for VAT compliance services in UAE and provides VAT advisory services in UAE for compliance-related questions.

Tax Invoice

When a registrant makes a taxable supply of goods or services, the registrant must produce a Tax Invoice. In the UAE, all registrants are required to provide a Tax Invoice for taxable supplies to other registrants when the consideration for the supplies exceeds AED 10,000. As a result, there are two requirements for issuing a Tax Invoice: first, the receiver must be registered, and second, the value of the goods must exceed AED 10,000. You must issue appropriate Tax Invoices for every taxable supply as a taxable individual. Please ensure that the Tax Invoices you send out match the following requirements:

  • The words 'Tax Invoice' are written in large letters.
  • Name, address, and Tax Registration Number (TRN) of the supplier - Name, address, and TRN of the recipient (if registered)
  • The serial or relevant Tax Identification Number (TIN), which aids in the identification of the Tax Invoice and its number in many invoices.
  • Issuance date - If different from the issuance date, supply date
  • Specifics of the products or services provided.
  • For each commodity or service, the unit price, quantity or size of supply, applicable VAT rate, and due amount (in AED)
  • Any discounts that may be available
  • Total amount due in AED - Tax due in AED at the current exchange rate
  • If the receiver requests a tax computation, the invoice must include such information, according to Article 48 of the Law.

 The Tax Invoice provides the foundation for the recipient to claim an input tax deduction for the supplier. As a result, companies must take precautions to guarantee that Tax Invoices issued under VAT are correct and full.

A VAT invoice provided by a taxable person must contain, but is not limited to, the following details in accordance with its terms:

  • A consecutive numeral assigned to distinguish the document.
  • The invoice’s issuance date.
  • The supply period (only if different from the invoice date).
  • The supplier’s name, address, and TRN.
  • For each description, the number of items or scope of services provided, the rate of VAT, and the amount due, all in UAE Dirham.
  • The entire amount of VAT represented in UAE Dirham, as well as the exchange rate used and the source of that figure.

Now let’s investigate the penalties related to tax invoices. Failure of the Taxable Individual to submit a Tax Invoice or equivalent record while making any supply is subject to a 2,500 fine for each identified occurrence.

Document and Management

Document management is a necessary part of VAT Compliance in UAE. According to VAT in the UAE, a taxable person is required to keep the following accounts and records:

  1. Keep track of all outgoing supplies.
  2. Tax invoices or other papers pertaining to inbound goods and services.
  3. A record of imported products and services.
  4. A record of the products and services that have been exported.
  5. Any tax credit notes or other documentation that have been issued.
  6. A record of items and services disposed of or utilized for non-business purposes, together with the taxes paid on them.
  7. A list of items and services for which no input tax was reclaimed.
  8. Keep track of any account or tax invoice modifications or revisions.
  9. A tax document including the following information:

-Tax on taxable supplies is payable.

-Tax owed on supplies for which a reverse charge is required.

-After any corrections or changes, the tax is required.

-Input tax that can be reclaimed on inbound supplies or imports

-After repair of mistakes or changes, input tax is recoverable.

 

So, what are the penalties in this area? According to the authorities, fines would not be less than AED 500 and will not exceed three times the amount of tax outstanding.

You will be paid AED 10,000 for the first violation and AED 20,000 for successive crimes if you fail to keep accounting records. A penalty of AED 20,000 will be assessed if an Arabic translation of transactions, records, or data is not given when the FTA requires it.

VAT compliance is essential to have a successful VAT registration in the UAE. When registering for VAT in the UAE, businesses must adhere to all legal regulations. In a similar way, ICB ensures our reputation and trustworthiness. Our area of expertise is delivering consistent VAT advice. We guarantee that we will be effective.

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