Whether the FTA has announced the final law for VAT in United Arab Emirates?
A) Yes, FTA has announced the executive regulations on VAT in UAE which is available in the web site of FTA (www.tax.gov.ae). All the provisions on VAT laws and regulations and many public queries are clear through the Executive Regulations.
Whether VAT implementation started in UAE?
A) Yes, UAE has moved to VAT regime with effect from 1st January 2018 and all businessmen who meet the turnover threshold limit should charge VAT on the transaction at 5%, except those transactions which are announced as zero rate or exempt. The details about the standard rate, zero rate and exempt items are included in the executive regulations.
What is the deadline for VAT Return filing and payment, is the dates are different for payment and Return?
A) The deadlines for VAT Return filing and payment are defined in the Tax Registration Certificate and these are either monthly or quarterly based upon the conditions by FTA.
The due date for VAT Return and payment is 28th day after the tax period closing (monthly or quarterly). There is no different dates for Return and payment.
How to remit VAT amount collected to Govt.?
A) We can follow E Dirham option for tax remitting. FTA has suggested to keep ready by getting the E Dirham card from proper channel with sufficient credits available.
Do we need to keep mandatory books of accounts for VAT?
A)Yes there are certain set of documents to be kept by all registered persons for VAT, as per the guideline issued by FTA. Certain set of documents should be kept for a period ranging from 5-15 years.
Whether we are eligible to claim all Input VAT incurred in UAE?
A) Yes, input VAT incurred in UAE are eligible to claim and adjust against the output VAT, except on those specific cases announced by FTA. Most of the input VAT is eligible to claim if this is not personal, entertainment or leisure or anything not related to the business.
What are the consequences for non registration for VAT or delayed registration?
A)Failure to register is an offence and FTA will charge penalty for non-registration, if the registration threshold conditions are met. On all registration applications, FTA is issuing the Tax numbers unless, the application is totally mistaken or FTA require some amendment.
Other consequence would be that if we are not registered, we cannot claim any input VAT incurred and eventually the cost of operations will go up.
VAT Return format is made available to public?
A) Yes, it’s available in the web site www.tax.gov.ae
What are the services in UAE which is not subject to VAT?
A) All goods and services except below are subject to VAT:
Certain government departments charges, which shall be separately announced by the Govt.
Public passenger transport like metro, public buses, taxi etc.
High sea sales and transactions.
Residential rent and lease.
Whether an individual or a non registered person can collect VAT or claim any input VAT incurred?
A) No, only the registered persons are eligible to charge VAT from customers and such non registered persons cannot claim any input VAT.
Most of the individual transactions are in the nature of end user and as such we may not be able to register in the capacity of an individual. If we do business transactions in the economic terms, then we need to register and collect VAT
Residential rents are VATable or is exempt?
A) No, residential lease or rentals or sales are exempt and is not subject to VAT. All commercial leasing/sale/rent are subject to VAT, subject to the terms and conditions prescribed by the FTA.
Any specific provisions applicable on Free Zone companies?
A) FTA will announce the list of Designated zones in UAE, and only those who are announced as Designated Zones shall follow special provisions as published by FTA. If there is no notification about designated zones, then they falls under a normal category and consequently the VAT law is applicable as per the normal standards.