Is your accounting software VAT compliant… Not sure ?
VAT is around the corner and coming to town, due to the fact that the UAE VAT is modeled after the EU VAT policies,
many businesses that are using accounting software that cannot handle the UAE VAT structure. Moreover, over 40% of
business not using an adequate accounting software to capture the various potential tax transactions. In light of this
here are a few important points a business should consider.
- Coming 1st January 2018, Business should register for VAT with the Tax authorities and file vat returns accordingly.
- It is mandatory for a business having a taxable supplies and imports exceed the threshold limit of AED 375,000 over
any 12 month period to register for VAT and should file their tax returns.
- It is optional for businesses having the taxable supplies and imports of AED 187,500 or less for the 12 months period,
however it is mandatory to register in case you want to claim input tax.
- Business should consider the Input and Output Tax, Zero Rated Tax and exempted transactions should be reported
while filing your tax returns.
How Does VAT works?
- Value Added Tax VAT : Multi Stage broad consumption Tax
- UAE VAT is charged at each step of your supply chain, Ultimate consumers pay the VAT cost while Business collect
and account for the tax
- Tax Invoice ( VAT ) Must be in Prescribed format for all Softwares Like Tally, Tally.ERP 9, QuickBooks, Sage &
- VAT Invoice Tax Invoice Number ( Serial Number) , Tax Invoice – Prominently displayed, VAT registration number,
Description of goods Supplier, Unit Price Excluding VAT, Vat Payable , Vat rate applied, Total
- UAE VAT Applicability All business that meet a prescribed turnover requirements must register VAT (Tax)
- VAT should not be a cost of doing business, unless providing exempt supplies / Import
- Basic Rules of VAT, Place of Supply, Time of Supply, Recovery of Tax
- Scenario With UAE VAT :- Output VAT, Input VAT, VAT Payable
There are two types of Supplies in the UAE VAT, such as:
- Exempted Supplies and Taxable Supplies.
- Taxable Supplies has been further classified to zero rated and standard/full rated.
UAE VAT is classified as below:
- Exempt Supplies are those kinds of supplies which are unaffected by VAT implementation in the UAE. Tax amount is
not charged on such supplies. Hence, the input tax in the exempt supply cannot be deducted.
Following are the common Exempt Supplies under the UAE VAT:
- Following are the Taxable Supplies or Standard Rated Supplies under the UAE VAT:
Zero Rated Supplies
- Zero-Rated Supplies are those supplies on which the rate of VAT is 0%. But in zero rated supplies input tax, can be
Promide Computer Technology LLC provides you with a flexible VAT compliant software. We can
provide existing businesses with a solution to be VAT ready before the 31st December 2017. Promide
Computer Technology is leading the way to ensure that VAT compliance is adhered to by the users.
We also offer and assist you with the following Services : –
- VAT registration and implementation services
- Training for VAT based Accounting Software;
- Auditing and Assurance services (External/Internal);
- Accounting services / MIS Reports / Book-Keeping / Pay Roll (Full / Part time);
- Fraud Investigation Services;
- Liquidation Services;
- Budget preparation
- Legal Consultancy
For more information on how to make yourself VAT compliant, and for the Free Demo please do
contact us on [email protected] .COM