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Firms need to prove VAT-compliance to Tax Authority
Speaking at a forum in Dubai on Saturday, Girish Chand, Director, MCA Chartered Accountants, said all the companies must maintain a record in order to show their turnover as well as whether they’re charging value-added tax (VAT) from the customer or not.
In addition, those companies which are not registered for VAT cannot charge the tax from the customers.
“When a tax official visits your company, he can ask for your records and it’s the responsibility of retailer, wholesaler or any other company to prove that their company’s turnover is less than mandatory threshold limit and hence, it’s not required to register for the VAT. In addition, he also needs to show his record if a company is charging the VAT from the client. Hence, maintaining record would become obligatory for all the entities operating in the UAE,” he added.
Mr. Girish was speaking at the VAT Talks conference held to discuss the impact of VAT on business operations especially their supply chain, working capital, commercial operations and IT systems.
You can view the latest VAT related events on our events page.
The UAE has announced that it will implement VAT from January 1, 2018, at five per cent. In addition to the UAE, Saudi Arabia has also announced the implementation of VAT as part of an agreement between Gulf states.
Mr. Girish pointed out that if a UAE-based supplier is exporting goods to any registered company in Saudi Arabia, then the local exporter here in the UAE will not have to charge VAT on the goods but the Saudi company will account using the Reverse Charge Mechanism. Similarly, it’s vice-versa for Saudi and Emirati companies.
MCA is an assurance, financial and business consulting and advisory services firm providing comprehensive and valuable solutions to their clients, using multidisciplinary professionals for over 8 years in Dubai and Sharjah, and now in Abu Dhabi.
You can reach them on 04 3319501 or write to GIRISH.CHAND@MCA.CO.IN