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For companies doing business in the UAE, adherence to tax laws is essential. The complexity of tax regulations necessitates close attention to detail to prevent mistakes that could result in penalties.
It is important for firms to assign VAT compliance tasks to VAT professionals in light of these factors. We at Intel Consulting recognize how crucial it is to adhere to tax rules and regulations. Our group specializes in providing all VAT-related services to UAE-based enterprises. We assist businesses with everything from registration to finding and fixing mistakes from previous filings, as well as informing them of modifications to tax regulations that could be relevant to them.
Comprehensive assessments of VAT compliance, health inspections, and internal and external audits are among the specialties of Intel Consulting. Our customized solutions ensure a proactive approach to compliance by meeting the unique demands of every organization.
A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.
Additionally, if a company’s imports and supply fall below the statutory registration threshold but above the voluntary registration threshold of AED 187,500, it may elect to register for VAT optionally.
VAT, as a general consumption tax, is applied at 5% to all transactions of goods and services unless specifically exempt in Article 46 of the Federal Decree-Law No. (18) of 2022 on Value Added Tax or subject to a rate of 0% as per Article 45 of the Federal Decree-Law
Zero Rated Sectors
VAT will be charged at 0% in respect of the following main categories of supplies:
- Exports of goods and services to outside the GCC
- International transportation, and related supplies
- Supplies of certain sea, air and land means of transport (such as aircraft and ships)
- Certain investment grade precious metals (e.g. gold, silver, of 99% purity)
- Newly constructed residential properties, that are supplied for the first time within 3 years of their construction;
Supply of certain education services, and supply of relevant goods and services - Supply of certain healthcare services, and supply of relevant goods and services.
Exempt Supplies: The following categories of supplies will be exempt from VAT:
- The supply of some financial services
- Residential properties (excluding the first supply of newly constructed residential property which qualifies for the zero-rating treatment);
- Bare land; and
Local passenger transport.
Businesses Registered Responsibilities
VAT-registered businesses responsibilities include:
- Must charge VAT on taxable supply of goods & services
- Keep a record of VAT related business (e.g. Tax invoices etc.)
- File periodic VAT returns.
Penalties will be imposed in cases of non-compliance with tax legislation.
Examples of actions and omissions that may trigger penalties include:
- A person failing to register when required
- A person failing to submit a tax return or to make a payment within the required period
- A person failing to keep the records required
- Tax evasion offences; where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.