VAT (Value Added Tax) is a charge imposed on certain provisions of goods and services in the UAE. VAT is calculated and charged on the value of services or goods that has been supplied under each sales or purchase transaction.
VAT is not a cost to the business, unless simple things are done timely and accurately. VAT is a form of indirect tax, were the Government is necessitating you to be an agent to collect and remit taxes to the Government. The tax (VAT) collected on sales is your payable to the government and tax (VAT) that you paid on account of purchase is receivable from government. Hence, the difference shall be your payable to or receivable from the government.
At HLB HAMT, VAT Consultants have substantial experience in undertaking VAT accounting procedure reviews to ensure that companies meet their VAT compliance needs as outlined in UAE. Similarly, other VAT legislation and accounting standards which must also be met.
VAT: A Basic Overview
Companies must maintain a separate record of the VAT you charge and the VAT you pay on your purchases. Over and above this companies are required to maintain number of records and information as required by the taxation laws. This will enable you to file the VAT return timely and accurately. Further, this will ensure sufficient documents and records for VAT audit by the Government agencies. VAT rules does not specify the list of accounts or nomenclature of accounts. However, it does require to maintain proper records to identify the below type which will be required to file the returns:
Your Total Sales identifying:
- Local sales
- Export sales and
- Exempted sales
Your Total purchases identifying :
- Local Purchases
- Import purchases
VAT Accounting Procedures in UAE
VAT is a transaction tax and hence it influences numerous processes within your business. Subsequently, the need for VAT accounting measures and controls arises, these are:
- Master data of suppliers and customers to the business, knowledge of their place of establishment
- Inventory masters
- Tax coding of transactions
- Sales and purchase schemes of accounting entries
- General ledger
- VAT recording and reporting
If there is a lack of ownership, control, or perceptibility covering any of these areas then this may influence the VAT return submission and the financial statements. When the information are not provided accurately you might be subject to hefty fines and penalties.
Our company offers you the exclusive range of services that we can provide to your company’s requirement related to VAT accounting and tax compliances. Our accurate review of VAT accounting – measures & delivers Value Addition by finding an efficient method to control the VAT functions within your business where ever possible. We also ensure that the processes and controls meet VAT audit and other applicable requirements. We are here to support you with all your VAT accounting needs.
We also offer accounting services alongside VAT consultancy in the UAE. We partner with you to complete your company’s bookkeeping process and VAT requirements. Additionally, we advise you about valuation, business planning and analysis of possible non-compliance. Apart from certified accountants, we have the skills, knowledge and experience to handle all your accounting and VAT requirements. Being your trusted VAT planner and financial consultant, we are ready to confront any financial challenges that you may experience. We adapt our services to the precise needs of individual companies, to support the proper operation and compliance.
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