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VAT in UAE: Simplify Compliance with Profitrack Accounting

Navigating VAT regulations in the UAE can be complex, but with Profitrack Accounting, you can ensure your business remains compliant and efficient. Our expert team offers comprehensive VAT services tailored to your specific needs, helping you understand and manage your VAT obligations seamlessly.

Understanding VAT in Dubai

Value Added Tax (VAT) is an indirect tax levied at each step of the supply chain, adding 5% to the cost of goods and services in Dubai. While end consumers bear the VAT cost, registered businesses act as tax collectors on behalf of the Federal Tax Authority (FTA).

Types of VAT Registration

1. Mandatory Registration

A business must register for VAT if:

• The total value of its taxable supplies and imports exceeds AED 375,000 over the previous 12 months.

• The business anticipates that the total value of its taxable supplies and imports will exceed AED 375,000 in the next 30 days.

2. Voluntary Registration

A business may apply to register for VAT if it does not meet the mandatory registration criteria but:

• The total value of its taxable supplies and imports or taxable expenses in the previous 12 months exceeds AED 187,500.

• The business anticipates that the total value of its taxable supplies and imports or taxable expenses will exceed AED 187,500 in the next 30 days.

Exempt Supplies under VAT

Exempt supplies are transactions that are not subject to VAT, meaning no VAT is charged on these supplies, and businesses dealing solely in exempt supplies cannot recover the VAT on their purchases. The Federal Decree-Law No. (8) of 2017 on Value Added Tax, Article 46, lists the following exempt supplies:

• Financial Services: Including life insurance and reinsurance of life insurance, as well as financial services not conducted for an explicit fee, discount, commission, rebate, or similar type of consideration.

• Residential Buildings: Excluding residential buildings specifically zero-rated.

• Bare Land: Unimproved land with no existing structures.

• Local Passenger Transport: Public transportation services within Dubai.

Zero Rated Supplies under VAT

Zero rated supplies are taxable supplies that are charged at 0% VAT. Businesses dealing in zero-rated supplies can still recover the VAT they incur on their purchases. Article 45 of the Federal Decree-Law No. (8) of 2017 on Value Added Tax outlines the following zero rated supplies:

• Exports of Goods and Services: Goods and services exported outside of Dubai.

• International Transport: Transport of goods and passengers internationally.

• Certain Means of Transport: Including trains, trams, vessels, and airplanes.

• First Sale/Rent of Residential Buildings: The initial sale or rental of residential properties.

• Aircraft or Vessels for Rescue and Assistance: Designated aircraft or vessels used for rescue and assistance by air or sea.

• Certain Investment Precious Metals: Specific types of investment-grade precious metals.

• Certain Healthcare Services and Related Goods and Services: Includes specified healthcare services and their associated goods.

• Certain Educational Services and Related Goods and Services: Includes specified educational services and their associated goods.

VAT Filing and Payment

Registered businesses must file VAT returns electronically through the FTA portal eservices.tax.gov.ae. VAT returns summarize the value of supplies and purchases made during the tax period and show the VAT liability.

Standard Tax Periods:

• • Quarterly for businesses with an annual turnover below AED 150 million.

  • Monthly for businesses with an annual turnover of AED 150 million or more.

VAT Payment Methods:

• Credit card or Debit card

• Local or international bank transfer

Our VAT Services

At Profitrack Accounting, we provide a full range of VAT services to support your business:

1. VAT Registration: We assist you in registering for VAT with the Federal Tax Authority (FTA), ensuring all necessary documentation is accurately completed and submitted on time.

2. VAT Compliance: Our team ensures that your business meets all VAT compliance requirements, including accurate record-keeping and timely filing of VAT returns.

3. VAT Planning and Advisory: We offer strategic advice to help you manage your VAT obligations efficiently, optimizing your tax position and minimizing liability.

4. VAT Audits: Profitrack conducts thorough VAT audits to ensure your business adheres to all regulatory requirements and identifies areas for improvement.

5. VAT Training: We provide training sessions to equip your team with the knowledge and skills needed to handle VAT processes effectively.

Benefits of Choosing Profitrack Accounting

1. Expertise: Our team of experienced accountants and tax advisors are well-versed in UAE VAT regulations, providing reliable and accurate guidance.

2. Tailored Solutions: We understand that every business is unique. Our services are customized to meet your specific needs and industry requirements.

3. Compliance Assurance: With Profitrack, you can be confident that your business remains fully compliant with all VAT regulations, avoiding any potential fines or penalties.

4. Efficient Processes: We streamline your VAT processes, saving you time and resources while ensuring accuracy and compliance.

Get Started with Profitrack Accounting

Please make sure your business navigates the complexities of VAT in the UAE easily. Let Profitrack Accounting handle your VAT obligations, so you can focus on what you do best growing your business.

Contact us today to learn more about our VAT services and how we can support your business’s success.

Profitrack Accounting is your trusted partner for VAT compliance in the UAE. Reach out now and simplify your VAT processes!