VAT service providers in UAE | What is VAT | VAT in UAE

VAT in UAE: The GCC (Gulf Cooperation Council) countries have decided to implement VAT. In the second half of this year the Finance Ministry will start registering companies for value added tax that are above the yearly threshold as the country gears up for applying the 5% levy from January 1 2018. For the Gulf Cooperation Council (GCC) governments VAT will be another source of generating incomes. The UAE businesses have to record their financial transactions make sure that all financial records are accurate and updated. Based on the financial records the businesses having minimum annual turnover will be needed to register for VAT. The businesses that do not meet the criteria of annual turnover and think that they don’t need to register for VAT should maintain their financial records, incase government may establish if they should be registered.

What is TAX?

TAX is the source through which governments’ raises income for public services. The government uses income collected from taxation paying for public schools and universities, defense, hospitals, etc.

There are many different types of taxes:

What is VAT?

VAT (Value Added Tax) is an indirect tax. Sometimes VAT is also mentioned to as a type of general consumption tax. In a country which has a VAT, it is levied on most supplies of goods and services that are bought and sold. VAT is one of the most common types of consumption tax found around the world. More than 150 countries have implemented VAT (or its equivalent, Goods and Services Tax), including all 29 European Union (EU) members, Canada, New Zealand, Australia, Singapore and Malaysia. At every step of ‘supply chain’ VAT is charged. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government. The tax paid by a business to the government is that it collects from the customers while it may also obtain a refund from the government on tax that it has paid to its dealers. The net result is that tax receipts to government reflect the ‘value add’ throughout the supply chain.

OBM Overview: The VAT Collected from the customers should reach government on time, and the great solution to perform this is through OBM. No worries if paid excess or deficit, OBM serves better for refund claim within no time.

Our Role: - We give proper guidance for accounting, calculation and online payments on time and assure the safety of your money to reach right hands

Why is the UAE implementing VAT?

The different public services like hospitals, roads, police services, parks, etc. provided by The UAE Federal and Emirate governments to the residents and citizens. The payment for these all public services is generated from the government budgets. By implementing VAT the country will get a new source of income which will fund to the continuous delivery of high quality public services in the future. This will also pave the way to help government to reduce the dependency on oil and other hydrocarbons for revenue and move towards its vision.

OBM Overview: As a part of welcoming the new system OBM plays a key role in serving the country and development in various government initiatives.

Our Role: Rebinding the trust of the client (business) and government.

Will all businesses need to register with the government for VAT?

There is no need to register for VAT by all businesses. The businesses that meet minimum annual turnover will have to register with government for VAT. It means that the small businesses that don’t meet the criteria will not have to register for VAT. This decision will protect small businesses from wide reporting and documentation system as VAT requires. The businesses that only provide goods and services which are not subject to VAT also not need to register.But all the businesses in UAE should record financial transactions and make sure that their all financial records are accurate and up to date. The organizations or businesses that think they don’t need to register with the government for VAT should maintain their financial records in any occasion, in case the government needs to establish whether they should be registered.The important point is that the government has not yet concluded the particular conditions like minimum annual turnover, etc. which will help to distinguish the businesses that do not need to register with the government for VAT.

OBM Overview: OBM helps the accounting and reporting for any business concern irrespective of the size. The financial transaction and relates are safe with OBM and serves as the per the Government rules and regulations.

Our Role: Safeguard the client with right decision on the right time. Functioning as an advisor for any queries related to the subject.

VAT-registered businesses generally:

If your business is registered for VAT you must report the VAT amount charged for you and the amount you paid to government on a regular basis. This will be an official submission and it is probable that the reporting will be made online. If the amount of VAT charged is more than you have paid then you have to pay the difference to the government. And if the amount you paid is more than you have charged then you can reclaim the difference.

OBM Overview: We deal with confidential data with updated financial position reporting to the client. All the government related and other docs will be safe with us.

Our Role: The scope of OBM is for daily basis reporting, VAT calculation and online payment within cut off time with minimal escalation. We assure the proper recording of all transactions and safety.

What does a business need to do to prepare for VAT?

The businesses will have the time to get ready before VAT will come into effect. Throughout that time the businesses should meet necessities to fulfill their tax obligations. The businesses can begin now so that they will be prepared later. The businesses need to make few changes in their core operations book-keeping and financial management, human resources, technology, etc. to comply totally with VAT. It is important that businesses try to understand the implications of VAT now and once the legislation is issued make every effort to align their business model to government reporting and compliance requirements. The final responsibility and accountability to comply with law is on the business.

OBM Overview: Be prepared for welcoming Tax. We assist all types of businesses to meet requirements and fulfill their tax obligations

Our Role: OBM act as financial advisors, accountants, tax advisors etc.

When are businesses supposed to start registering for VAT?

Registration for VAT is expected to be made available to businesses that meet the requirements criteria three months before the launch of VAT. Businesses will be able to register online using eServices.

OBM Overview: Registration for any licenses are essential part for any business.

Our Role: We assist all clients for speedy procedures and eservices.

How often are registered businesses required to file VAT returns?

The VAT return submission is expected on a regular basis for registered businesses. The default period for filing VAT returns for the majority of businesses is expected as three months. The return can be filed through online eServices.

OBM Overview:VAT Returns on daily basis. Proper records submission process.

Our Role: Filing returns and online e services.

What kind of records are businesses required to maintain, and for how long?

The businesses will need to maintain the records which will allow the authorities to identify the details regarding the business activities and to review transactions. The details regarding the documents which will be required and the time period for maintaining them will be informed by the authorities.

OBM Overview: The secured data and records with OBM.

Our Role: Proper channel of communication and recordings by well-trained staffs.

Changing my business systems for VAT reporting will cost money. Can the government help?

The government will provide information and education to businesses to make them aware of VAT and to help them make the transition. The government will not pay for businesses to purchase new technologies or hire tax specialists and accountants. That is the responsibility of each business. The government will provide guidance and information to support you and will give businesses time to prepare.

OBM Overview: Being intermediary for the business and the government and guide the business on proper route.

Our Role: Being active in all support related to VAT and Tax matters.