Ensuring reliable policies and procedures are in place to record and report the VAT transactions correctly lies with the corporate entity. Corporates are required to maintain the record for 5 years and present them to FTA as and when required. Failure to maintain such records may result in administrative penalties. UAE has adopted self-assessment which mean corporates are required to ensure sufficient skills and resources are available to record and report the tax correctly. As a Microsoft Dynamics ERP customer configuration and implementation of VAT lies with the customer. You or your consultant must answer below to ensure correct configurations are implemented –
- Are we registered as an LLC or a Free Zone entity
- Does our entity falls within group taxation
- Do we have entities registered in more than one emirates
- Do we have scenarios where we import anything from other GCC countries
- Do we have scenarios where we import anything from non GCC countries
- Do we have scenarios where we export anything to GCC countries
- Do we have scenarios where we export anything to non GCC countries
Based on the above scenarios you will be able decide how customers, vendors and item tax groups are required to be configured. To reduce manual calculation during the transactions you must ensure correct tax codes of 5%, 0% and Exemption are applied. Also you need to make sure reverse charge scenarios are catered in terms of import from GCC and non GCC countries.
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 email@example.com or Register for our free overview session.