It is a known thing that VAT is payable to government by the sellers or manufacturers of goods. VAT implemented on selling goods plays an important role in national GDP. For more than three decades, this system is used to generate revenue for the government. As VAT is recently introduced in UAE, there are a lot of questions in people’s mind regarding this. Since this is a complex thing to understand, you can also seek help from any VAT consultant in Dubai to have some expert opinion. In this article, you will read about some things that you need to know VAT in Dubai:
1: VAT started in UAE and other Gulf countries from 1 January,2018.In the start only high revenue earning companies will register and eventually it will become obligatory for every company to register their VAT.
2: Even after VAT, UAE will stay tax free in many areas as there was no income tax on salaries and it will stay same. Foreign ownership is also tax free that provides ease of doing business in area.
3: To prevent a common/low earning man from the effect of VAT, government has exempt many items from it. There are 100 food items, bicycles, education, health and social services that are exempted in VAT.
4: Luxury items like electronics, jewelry, cars, entertainment, hotels are included in tax paying category.
Tips on saving money & time on VAT: For starters there are following tips which you need to learn in order to save some money or time on VAT:
1: Make payment of VAT on time: Avoid any consequences by paying your VAT on due date. If your tax is unpaid on due date you will be facing penalty of paying extra amount. First time, it is ignorable by issuing a warning but after that you will have to face the penalty.
2:Charge appropriate amount: When you are calculating VAT according to standard charges, take care of number or figures. If you are facing some problem then you must take expert’s advice.
3: Keep VAT invoice: When purchasing items which are under VAT, ask for its VAT invoice so that you can claim the amount back. For example, you should keep hotel invoice with you after paying the bill, so when you claim your tax at the end of the year, you can get back the VAT amount that you paid at the hotel.
4: Claim VAT without delay: Claim your expenses as soon as possible to keep the cash flow run smoothly. Look at more info for further details.