Businesses with an annual turnover of more than AED 375,000 should apply for registration on or before December 4, 2017, the UAE Federal Tax Authority said.
Oct 31, 2017 is a deadline for businesses with Annual turnover of Dh150 million.
Nov 30, 2017 is a deadline for businesses with Annual turnover of Dh10 million but less than Dh150 million.
Dec 04, 2017 is a deadline for businesses with Annual turnover of more than Dh375,000.
With the announcement of the introduction of VAT in UAE from 1st January 2018, it is mandatory for the businesses to register themselves as per the criteria specified in the new tax regime. All the individuals or the firms engaged in businesses activity have to comply with the rule laid down by the Federal Tax Authority. For example, Registration will be necessary for all the firms that fall under the threshold annual turnover of AED 375,000 and more than 3.5 lakh of businesses are expected to register under this new regime. The businesses that have not registered for VAT will neither be able to charge VAT on their sale nor will be able to claim Input VAT paid on their purchases. Moreover, a business can get itself registered, regardless of the fact that they meet the threshold annual turnover criteria or not, i.e. there is an option of voluntary registration too, for the businesses that don't fulfill the minimum annual income criteria but are above the base of AED 187,500. The registration criteria have been described below in more explanatory form.
Mandatory Registration: It is mandatory for the businesses to register themselves if
Voluntary Registration: The businesses that don't meet the mandatory threshold criteria can opt for voluntary registration if
UAE and associate GCC nations in the form of Value Added Tax (VAT) on all goods and services at a standard rate of 5% with effect from 1st January 2018. Now the question is that Will consumers spend take a hit or it will be business as usual for the retailers and manufacturers?
The new value-added tax (VAT) is coming into effect from 1st January 2018 for the very first time in UAE, Ultimately it will affect small businesses as well, main concern of small businesses is all about the financial and operational impacts of VAT compliance, especially since they’re used to operating in a low-tax business environment. Most people have a preconceived notion that VAT is a burden for all including small businesses. However, if your business is organized with the help of a VAT expert, VAT may not be too onerous to you.
VAT is an indirect tax that is applied upon the consumption of goods and services, and is levied from VAT registered businesses that supply the goods and services during the process of their businesses. It is levied at every stage of the supply process and different businesses collect it in order to pay it to the government. It is the consumer that incurs and pays the VAT eventually.
Businesses have to register themselves as per the criteria laid down by the Federal Tax Authority. It is mandatory for the businesses to register themselves if their annual turnover exceeds AED 375,000 and this threshold must have been exceeded in the last 12 months.
The businesses that don’t meet the mandatory threshold criteria can opt for voluntary registration I.e. if the annual turnover exceeds AED 187,500 but is below AED 375,000 and this threshold is expected to be exceeded in next 30 days and In last 12 month duration, the taxable expenditure exceeds the worth of voluntary registration threshold. Upon registration, the businesses will be issued a VAT registration number, which will be mentioned on tax invoices etc.
VAT will be implemented from 1st January’ 2018 in UAE. And all the businesses falling with in the territory of UAE has to register their entity before the mentioned date of implementation. VAT registration process has started with effect from 1st October, 2017.
With effect from 1st January 2018, a standard rate of 5% will be charged on the taxable goods across UAE. And it won’t be charged on non-taxable goods and services that includes Health, education, and local transport etc.
Yes, the non-residents are liable to register for VAT if they make taxable supplies, until the presence of any UAE resident, responsible for VAT accounting of such supplies. The exemption will require, for example, when a business of UAE is required to account for VAT under a reverse charge mechanism for the purchases from any non-resident.
As per the VAT law of UAE, the non-compliance will invite penalties. Moreover, there will be a constant risk of losing confidence among the customer base of businesses and given the incompliant nature of the business methodology, it will lose its legal status and thus, is bound to fall.
Businesses dealing with exempted supplies will not be able to charge from their customers. Similarly, the purchases on which the VAT has been incurred cannot be claimed. Businesses with partially exempted supplies can register for VAT and can claim for the VAT incurred on the taxable supplies.