Compliance for VAT in UAE

Implementing VAT is UAE not only to configure your ERP but also to make sure your team is capable enough to execute the transactions correctly. They are also responsible to compute the correct taxation and to report them in a timely manner. UAE has adopted self assessment method for collection and reporting of VAT, failure to do so may result in heavy penalties. As per the UAE VAT regulations the complete responsibility to implement VAT lies with the company itself. Law says there are two type of penalties that can be imposed.

  1. Tax evasionAdministrative Penalties
  2. Administrative Penalties

Tax Evasion means any act by any responsible person within an entity who deliberately reports wrong tax or falsify or records to evade tax. This might include undervaluing your tax invoice or not registering your entity for VAT even if it falls within mandatory registration threshold.

Administrative Penalties comes when staff executes the wrong transactions or fail to comply all the requirements. This might include failure by the Taxable Person to display prices inclusive of Tax, failed to apply tax correctly i.e. 0%, 5% or exemption. Administrative penalty may also be imposed if company is failed to issue tax invoice or credit notes in timely manner or submission.

Making your team compliant with tax laws, Finance team is required to adopt the following –

  1. Appoint tax consultants who advise on the transactions as per UAE law
  2. Appoint software consultants who configure / implement the system as per UAE law and advises from the tax consultant
  3. Train relevant staff in order to properly asses and record the transactions.

We at Tech Ventures provide the solutions and consulting in order to ensure your company is compliant with tax regulations of UAE. We expertise in implementing Microsoft Dynamics ERP Solutions and custom applications. For more information drop an email at mustafa@techventures.ae or Register for our free overview session.

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