VAT in UAE - Vat Return Filing in UAE
The percentage of VAT introduced in UAE is 5%. Companies having an annual turnover of 375,000 AED and more, must register their businesses for VAT. Implementation of VAT has been made compulsory and businesses not complying with it will be penalized.
VAT is Crucial
Complying with VAT has been made mandatory but a number of businesses are still trying to comply with the VAT regulations. This has caused delays in VAT Registration for the businesses. Regardless of the penalties for late registration of VAT, many businesses still have not registered. This is because they find it difficult to understand the VAT processes.
The VAT is not easy to understand for all the companies that are being operated in the UAE. This is because there are a number of complexities that are associated with it. That is the reason why most of the companies move forward to the expert VAT consultants in UAE.
What are Common Mistakes Regarding VAT Return Filing in UAE?
There is no doubt in the fact that we all do mistakes. Small businesses have to go through a lot in order to keep providing their services in legal manners. This is because sometimes following the legalities may be quite difficult for the companies.
The introduction of VAT in UAE has caused a lot of confusion for small businesses. Due to the confusion, they commit different mistakes. The main reason behind this trouble is that the businesses forget about the VAT filing due date. While paying attention to other functions, they often overlook the importance of vat return filing in Dubai.
Read More: Get VAT Registered
What are the most common mistakes made by SMEs on VAT filings in UAE?
- Lack of knowledge, Bigger Problems
The rate that should be charged on VAT is critical for all the business owners. Businesses having zero or no knowledge about the standard or zero rates of VAT might find themselves in trouble if they do not count on it.
- Invalid Tax Invoices
There are certain details that should be there in the tax invoices. If the required information is missing, the invoices will be considered invalid.
- Proper Checking of TRN Number
If the TRN number of the customer is not checked properly, it may lead to false information.
- Wrong Tax Codes
If the tax codes are wrong or insufficient, the reporting will not be considered accurate.
- Incorrect VAT Calculation
If the VAT is not computed correctly for using a profit margin scheme, it will be considered a huge mistake and can result in receiving a penalty.
- Wrong Rate Percentage
The implemented rate of VAT in the UAE is 5%. Businesses charging more or less than that will not be permitted.
- Charging VAT on Excluded Items
If an item doesn’t come in the category of taxable goods, charging VAT on it will be considered unacceptable.
- Lack of Evidence to support VAT reclaims
If the company is lacking enough evidence in order to reclaim its VAT, the VAT return filing in UAE wouldn’t proceed.
You may want to Know: Steps to Follow in Filing Your VAT Return in UAE
Authorities have given quite good opportunities to the people so that they may learn about VAT. A number of conferences also got organized in order to help people and train them according to VAT. If some of the businessmen still fail to implement it in their businesses, it would be a huge failure for them.
Understanding the rules and regulations of VAT is quite complicated for some companies. Although the principles are quite straightforward yet some of the people are finding it a huge challenge. The businesses are trying to cope up with its rules.
Some of them retaking the help of legal consultants in UAE as well. They are all trying to make sure that they comply with all the regulations of VAT but no prior experience is becoming a hurdle in their way.
Although the issues may seem big, they will get resolved as the VAT will adjust to the businesses. Incorporation of VAT in businesses for some time will make it easy for the people to deal with it and implement it.
Find more: How to file VAT return in UAE?
There is nothing to worry about when you can get the guidance from the tax agents in UAE. These agents are trained regarding VAT and know how to incorporate the VAT in the businesses. A number of companies are taking help from them in order to comply with VAT and its legislative required to file vat returns. Things will become better in some time but till then we all need to serve time in learning about VAT.
Contact us for more information regarding VAT in UAE. We would make sure that you run your business operations as per the VAT rules and regulations and in the most remarkable way.