VAT in UAE

Value added tax or VAT is an indirect tax, which is imposed on goods and services at each stage of production, starting from raw materials to final product. VAT is levied on the value additions at different stages of production, including the Deemed Supply

In effect, VAT is levied on the gross margin at each point in the manufacturing-distribution-sales process.

• VAT Registration
• Accounting Records and Book Keeping
• VAT Invoicing
• VAT Return Filling & Payment

If the Annual Turnover of the company is more than AED 375,000/, it is mandatory for the company to register under UAE VAT before the end of the year 2017. If the Annual Turnover is between AED 187,500 & AED 375,000/, it is optional for the company to be registered under UAE VAT law. Further, if it is less than AED 187,500/, the company need not register under this law. For the startups, if the VAT attracted expenses are more than AED 187,500/, such companies have to be registered under the UAE VAT law.

It is mandatory for every taxable person to maintain proper books of accounts under UAE VAT law. In addition to that the authority can ask for additional documents such as, annual accounts, general ledger, purchase day book, invoices issued, invoices received, credit notes, debit notes, VAT Ledger etc. Under the UAE VAT law the books of accounts and records are to be maintained for five years.

VAT Returns are required to be filed quarterly. Monthly returns may be required for large tax payers. Returns need to be filed within 28 days of tax period ending.

Tax invoice must be issued by any registered person who makes taxable supplies. This is mandatory and must adopt prescribed format.

Failure of the taxable person to submit a registration application within the timeframe specified in the tax Law	AED 20,000/-
Failure of the taxable person to inform the authority of any amendments of the information relating to his tax record kept by the authority	AED 5,000 15' Time AED 15,000 Repetition
Failure of the person conducting business to keep the required records and other information as required by Tax procedures and Tax law	AED 10,000 15t Time AED 50,000 Repetition
Failure of the person conduction business to submit information in Arabic when requested	AED 20,000/-
Failure of the registrant to submit Tax return within timeframe specified by tax law.	AED 1,000 1st Time AED 2,000 Repetition within 24 months
Failure of the person appointing legal representative to inform authority of his appointment within time frame	AED 20,000 to be paid by legal representative
Failure of the person appointed as legal representative for the taxable person to file tax return on time.	AED 1,000 1st Time AED 2,000 Repetition within 24 months