Vat Accounting Services

VAT is a globally accepted transaction tax levied in GCC countries form First January 2018 at 5 %. Within 100 days of VAT implementation, there has been a total compliance of 98% according to Federal Tax authority of Dubai, a highest in the world.

Implementation and execution of VAT involves calculations at every transaction. Transfer of VAT from one hand to another hand generates two kinds of variations in it.

Output tax: A tax that is payable to the supplier of your goods constitutes Output tax.

Input tax: a tax that you receive from your buyers makes input tax.

Due to the formation of these two variations in the tax, there arises tax liability  i.e.; the difference between the output tax and the input tax payable to the government.

Tax liability can be of two types: when output tax you have collected from the customer is more than the input tax you have paid to your suppliers, then you have to pay the difference between them to the government via tax return.

When the input tax you paid to your suppliers is more than the output tax you have collected from customers, then the difference can be claimed back from government or carried over as excess tax paid to the next period via a vat return

All these transactions and calculations come under VAT return filings.

They are done according to the compliance set by federal Tax authority of UAE which needs professional diligence and expertise. Failing to do so can result in a penalty from the government.

These calculations are done on the major transactions of VAT while dealing with government or another business. But there are many other calculations needed to be done within the company and also while calculating the VAT values of various products.

VAT values depend on the type of products and services. Variations in implementation of VAT are:

  • Exempted supplies

    education, basic food items, healthcare, transport, first residential transaction come under exempted supplies.

  • Taxable supplies

    major products and services except few like financial services have a VAT of 5% levied on them.

  • Zero rate supplies

    it means on these items VAT is still applicable, but the VAT charged is 0%. some items like gold, silver, platinum are zero rated and VAT value is calculated as zero on them.; meaning no VAT is charged. You need to record these zero rated items and provide the record on your tax return filing. Exports made from UAE and Dubai also come under zero rated supplies.

You have to maintain a list of all these goods and services independently to provide them to the government on tax returns filings.

Why is it beneficial?

      • Financial statements for potential investor: : businesses or private investors looking to invest in a company will give more importance to financial reports provided by an external audit firm. For public firms, an external audit report is a must but for private firms and small business looking for lenders will also benefit from it. A financial statement given by an external accounting firm can increase your credibility in the market.
      • Unbiased expert recommendations: A fresh perspective of your business can give you insights which you have never thought about. We provide expert recommendations based on concrete evidence found in your company records.  We maintain an independent attitude and highlight your risk issues while suggesting appropriate changes for the betterment of your company. Your employees can be unwilling to change and overlook the benefits of new processes.
      • Educating business owners: : when working with external business auditor’s, business owners and top management learn about the importance of accounting information. They gain professional insights into their accounting processes and improvise on them increasing maximum profits for their companies.
      • Get an internal audit of your business by our firm to propel it into greater heights of success.