Understanding the principles of VAT registration or its overall rules and regulations have been quite complicated for many businesses in Dubai. While it has been mandatory for most businesses operating in the UAE to henceforth complying with the VAT regulations, this misunderstanding, especially among SMEs, has caused a delay in having registration and mistakes in tax filing. If you’re one of those business houses still struggling to understand the principles of VAT, considering the high penalty, it’s the high time for you to get in touch with an expert VAT consultancy in Dubai ( Ethicsplusuae/vat-consultancy ) which will do everything for your business from business evaluation to VAT registration and VAT filing to guidance.
Avoid Common Mistaken About VAT Filing
Meanwhile, it has also been noted that many businesses are trying to get registration, computing taxes, and filing VAT on their own and consequently making lots of mistakes in the process. Never take the issue so lightly and mind well that making mistakes in TAX matters makes you legally obligated, penalized, and thus tolls on your business quite seriously.
Outfitted with a VAT consultancy in Dubai, you can effectively avoid some common mistakes in VAT registration or tax filing and reap the best benefits of VAT.
In general, the percentage of VAT which has been newly introduced in the UAE is 5% while some companies are taken under 0% also. Companies with an annual turnover of 375,000 AED or it's more must-have VAT registration. Some businesses are given exemption such as health, food items, bicycles, education, and social services, etc; however, companies that come under 0% must get registration. At the very first place, businesses with minimum or no knowledge become confused whether or not they are supposed to get registration. Here the support of a VAT consultancy in Dubai appears handy because they evaluate your business type, its volume of sales turnover, profitability and some other factors and accordingly suggest you if having registration for you is mandatory or not.
Wrong Calculation of Tax
Unlike direct tax VAT refers to a general consumption tax should be implemented and collected incrementally on every stage of the supply chain whereas the consumers pay the taxes. As a businessperson working in the UAE, you should be aimed at paying taxes on your purchase bills and equally collecting taxes on your sales bills. The taxes you pay are considered as input tax and that you charge against sales is output tax. If input tax is less than output tax, you’ve to pay the balance to tax authorities, but wherever input tax is higher than output tax you’ll get a tax refund after filing of the tax return. This is a major area of confusion, where most businesses those who avoid VAT consultancy in Dubai make mistakes in proper understanding and calculation and face a hefty penalty.
Not checking proper TRN number of the customer often leads to false information. Similarly, if you use wrong or insufficient tax codes, this will a major mistake and you will be charged. Surprisingly, it has been found that many businesses deal with exempted product items are also changing VAT which is not going to be accepted by tax authorities. often people are forgetting the due dates of filing VAT and failing dates is liable to be punished which may come in various forms. Thereby, it would be the best practice to leave the tax issues on VAT consultancy in Dubai ( https://ethicsplusuae.com/ ) since they are experts enabling you to focus on your business better where you are needed.