Value Added Tax or VAT is a goods and service tax that was imposed upon the business in the UAE very recently. Therefore, getting registered to VAT has become necessary for the businessmen who have business setup in UAE.
The VAT was introduced in UAE on 1st January 2018. The traders who have turnover more than 375K per annum are to payable of this tax after business setup in UAE to the Government. The businessmen who have turn over between 187k and 375k per annum can register themselves voluntarily for the Value Added Tax. The tax payable amount is 5%.
The businessmen need to follow a lot of things about tax laws while going for the new company formation. Here are the reasons why they should hire a tax professional:
To understand the business model: Understanding the business model is essential for a proper plan of VAT implementation.
You should have knowledge about the business model that will be most suitable for the UAE VAT regulations. Professional VAT advisors in Dubai can make you understand the matter.
To be registered for VAT: Registration for VAT has become essential for the business organizations after the introduction of VAT law in the UAE. But all businesses do not need to pay the Value Added Tax. There are the experts of tax to make you know whether or not your business requires registration for VAT.
To assess the impact of VAT on business: A company is responsible for recording all financial details. Once your business is registered to the VAT, you can apply to charge the tax from your customers for the goods and services. It is one of the upsides of VAT implementation. There are downsides also. Professionals will give you a clear picture of both of the sides.
To deal with the procedure of registration: Various countries have the various set of rules and regulations while it comes to taxation. It might not possible for you to complete the registration procedure on your own, especially if you are a foreign investor. You need expert help to register your business under the VAT tax law of UAE.
To claim for refunds: Businesses under VAT law have the opportunity to claim for refund. But the entire process of getting the refund form, filling it to claim, and receiving the refund amount is quite complicated. There are a lot of VAT consultants to help you in a complicated situation.
Whatever be the size of your business setup in UAE, small or large, you should hire a VAT expert for proper implementation of VAT in your business.