The United Arab Emirates has been the business hub of the Middle Eastern countries of the world for decades now. It has attracted the international community too, due to which numerous global projects were initiated in the region. All of this led to the economic and financial boom, which encouraged many young people to start their own companies instead of trying to find jobs in multinational corporations.
Even now, there are too many newly registered companies in the UAE that are contributing to the growth and progress of the region, and the number is not going to stop or decline any time soon. When the country is providing a rich atmosphere to the companies to flourish, they too have the responsibility of paying it back through taxes. The taxation system of UAE is different from the majority of the world, which can cause confusion to them, so they need to beware of VAT considerations to fulfill their responsibility efficiently.
Give a detailed read to this article to explore the value-added tax considerations for newly registered companies in the United Arab Emirates.
Table of Contents
Top 6 VAT Considerations Newly Registered Companies Should Adhere
If you are a newly registered company, you might need some time to get comfortable with the economy as well as the taxation system. An important thing to remember in this regard is to stay well informed about the value-added tax. If you take too much time to develop insight into it, it can work against you and cause you loss. So, make sure your knowledge and information are optimized and will not make you suffer any loss.
Here are some of the major VAT considerations newly registered companies should adhere to maintain a good market reputation and earn profitability.
VAT Registration
The first and foremost VAT-related consideration that the newly registered companies should adhere to is the VAT registration. You can voluntarily opt for VAT registration if you have not yet reached the threshold. However, if you have reached the threshold of AED 375,000 per annum, you must register for VAT.
Many newly registered companies consult the best VAT consultancy in Dubai as they find it confusing, which you can follow too in case of any difficulty.
VAT Filing
The next critical VAT consideration that the newly registered companies need to take care of is VAT filing. VAT is different from other types of taxes in the way that they do not offer any returns. On the other hand, VAT is applicable according to the value of goods and services, so if the value declines during a significant period, the taxpayers can claim VAT returns. However, an important point to consider in this regard is that you will have to register and deregister for the process on your own.
Tax Group
An important consideration that the newly registered companies need to take care of in terms of value-added tax is the tax group. The taxation authority in the United Arab Emirates has formed various tax groups and assigned the details accordingly to various companies in order to manage tax amounts efficiently. You can consult experts to manage tax groups efficiently.
Penalties
Another crucial consideration that the newly registered companies have to consider in terms of value-added tax is the penalties. If you fail to comply with any requirement of VAT on time, you will be held accountable for it, and the result will be penalties. It can be registration and deregistration for VAT, VAT returns, record maintenance, provision and VAT audit, etc.
Late Treatment
Another significant value-added tax-related consideration for the newly registered companies in the United Arab Emirates is the late treatment. If you fail to fulfill your tax responsibilities on time, it will not only expose you to VAT penalties and fines but you will also be deprived of special assistance and treatment. It will also negatively impact your position in the market, which will cause even more loss. So, make sure to fulfill your responsibilities on time.
Eligible Goods
The last and most critical VAT consideration that the newly registered companies should adhere to is the eligible goods. Not all goods and services are taxable under the value-added tax in UAE. Some goods and services are exempted, while the tax rate of others is different too. So, make sure to get in touch with the best consultants and let the experts share guidance of eligible goods to help you avoid making any mistakes.
Take care of VAT consideration for better profitability!
The purpose of the implementation of value-added tax is to offer more benefits to the taxpayers. So, do not add up your losses by forgetting to take care of the considerations. Get in touch with a professional to discuss and resolve any ambiguity or confusion you have about VAT.
Learn More:
