Taxation Services
Our Services :
- Value Added Tax
- Excise Tax
- Economic Substance Regulations (ESR)
VALUE ADDED TAX (VAT) IN UAE
VAT in UAE is applicable from 1st January 2018 and registration for VAT is being handled through Federal Tax Authority (‘FTA’) portal i.e. tax.gov.ae. As per Article (3) of Decree-Law standard VAT rate in UAE is 5% on taxable supplies and import of goods and services. Other GCC countries also are being implementing VAT in their region, so far KSA & Bahrain has implemented VAT in their region.
FEDERAL TAX AUTHORITY (FTA)
The Federal Tax Authority (FTA) is responsible for setting up and maintaining records on taxpayers and on taxes paid. It also issues necessary guidelines and clarifications to taxpayers on matters related to federal taxes and related fines.
WHY A VAT CONSULTANT IS NEEDED IN
At the beginning of 2018, the government of UAE rolled out the first-ever iteration of Value Added Tax in the country, which levied on a range of applications in order to stimulate the local economy. The Ministry of Finance specified standard rated VAT of 5 per cent implemented on taxable transactions for various goods and services, as well as on the use of public infrastructure and services. And now after couple of years of implementation of VAT things are streamlined & FTA had issued many clarifications & guidelines to clear the issues around it. So, make sure your business following the VAT legislation in correct manner, with the help of a professional VAT consultant in Dubai – partner with VNY Management Consultant today.
HOW VNY MANAGEMENT CONSULTANT CAN HELP YOU?
Due to the nascent nature of the legislation in this country, most businesses only have some basic idea about the requirements involved in VAT compliance, such as the proper documentation, proper interpretation of Articles of VAT Law and filing procedures entailed in the compliance process. VNY Management Consultant have a team of VAT consultants and tax advisors in Dubai who can help your business structure in-house recording and filing processes to ensure that your company does not incur any penalties from improper compliance. We will help you identify the potential financial challenges you might have faced during the implementation of VAT & can conduct VAT health check to identify the problem areas.
- VAT Registrations
- VAT Return filings.
- VAT Refunds.
- VAT Voluntary disclosure.
- VAT Reconsideration.
- VAT deregistration
- VAT Audit
- Liaison with FTA on their tax-related matters
Excise Tax
Excise Tax is a form of indirect tax levied on specific goods that are harmful to human health or the environment with and objective to reduce consumption of these harmful products.
Unlike VAT, Excise tax is paid only once by the producer of goods when goods are released for consumption. Once tax is paid, the product is sold throughout the supply chain with “Tax paid status” and it is ultimately passed to end consumer.
EXCISE TAX REGISTRATION
Any business which imports, produces or stockpiles excise goods, or releases them from a designated zone in the UAE, should register for Excise Tax. There is no registration threshold for Excise Tax.
When to register:- You have a liability to be registered within 30day from the end of the month in which you formed the intention to import, produce or release goods from a designated zone.
Late registration:- If you fail to notify FTA within in the timeframe, FTA may collect the value of underpaid excise tax and may charge you administrative penalty.
Penalty for late registration – as per applicable law
You are not permitted to conduct any such activities unless you are registered for excise tax.
FILING EXCISE TAX RETURNS/FORMS
Once you have registered for Excise Tax, you are required to file your Excise Tax return by the 15th day following the end of each tax period.
Excise Tax returns are automatically populated based on the information submitted in the following declaration forms during, or at the end of, the tax period:
- Excise Tax import declaration forms
- Excise Tax production declaration forms
- Stock piling declaration
- Designated zone reporting declaration
- Lost and damage declaration
- Deductible Excise Tax declaration
- Import declaration by Non registered importers
- Other declarations
OUR EXCISE TAX SERVICES
VNY Management Consultant with a team of professionals having in depth knowledge and practical experience in Excise tax can assist you in Excise Tax related matters:
- Excise Tax registration
- Product registration
- Filing monthly returns
- Filing refund application
- Filing declaration forms
- Deregistration
- Other consultancy services
Economic Substance Regulations
Economic Substance Regulations – an initiative by Organization for Economic Co-operation and Development
The United Arab Emirates has in coordination with the Ministry of Finance implemented Economic Substance legislation in order to comply with its commitment as a member of the OECD (to comply with EU’s requirements to be removed from the list of non-cooperative tax nations). The Economic Substance Regulations are applicable to all the Licensees within the UAE’s jurisdiction and include all Licensees operating within free-zones in UAE. Offshore Companies, any person or company holding a trade license or certificate of incorporation to carry out any business activity is coming under Economic Substance Regulations. This is in the benefit of the real investors in UAE & a company in UAE will have its Global value.
Because of zero corporate tax many global business house has opened their Head Offices in UAE. Sometimes the profit shifting to UAE is harmful and loss for countries where there is tax.
The guidelines apply to companies that carry out any of the following Relevant Activities.
- Banking Business
- Insurance Business
- Investment Fund management Business
- Lease-finance Business
- Headquarters Business
- Shipping Business
- Holding company Business
- Intellectual property (IP) Business
- Distribution and Service Centre Business
EXEMPTIONS:
a) Entities that are tax resident outside the UAE
b) Investment Funds
c) Entities that are wholly owned by UAE residents and that:
- are not part of a multinational group, and
- only carry out business activities in the UAE
d) UAE branches of a foreign head office / parent whose relevant income is subject to tax in the jurisdiction of the foreign head office / parent
PENALTY FOR NON-COMPLIANCE
- Failure to file ESR notification
- Failure to file ESR report
- Subsequent failure & Risk of Non-renewal of License or Deregistration
- Failure to provide accurate information
What VNY Management Consultant Can do for you.
Our professional Tax consultants will understand the structure of the group and do the assessment of requirements of the new Economic Substance. Team VNY Management Consultant will help you to be compliant in UAE.
We can take care of the Annual Notification
Economic Substance Test (When Relevant Activity is performed)
Economic Substance Report