Category Archives: TAX

Who Must Register For Excise Tax?

Who Must Register For Excise Tax ? | TAX Advisory Services in UAE

The Federal Decree-Law No. 7 of 2017 on Excise Tax stipulates that businesses/ persons that are engaged in any of the below activities must register for tax.

  • Import of excise goods into the UAE;
  • Production of excise goods in the UAE;
  • Release of excise goods from a designated zone into the UAE;
  • Warehouse Keepers, in certain cases;
  • Stockpiling of excise goods for business purpose in the UAE in certain cases where excise tax has not previously been paid on the goods in the UAE.

Know More About Excise Tax In UAE

know more about excise tax in uae
  • Excise tax is an indirect tax where business entity collects excise tax from customers and pays to the Government.
  • Excise tax is levied on specific goods which are harmful to human health or the environment.
  • Excise tax is levied with an intent to reduce consumption of specific goods and simultaneously to raise government revenue to use for public services.
  • Excise tax is levied on Tobacco products, electronic smoking devices and tools, liquids used in electronic smoking devices and tools, carbonated drinks, sweetened drinks, and energy drinks.
  • Excise tax rate ranges from 50% to 100% on price of excise products.
  • Business entities with the following activities are obligated to register and comply with excise tax law:
    • Import, production, release of excise products
    • Warehouse keepers and stockpiles of excise products in certain cases
  • Business entities who deal with excise products must comply with:
    • Register with Federal Tax Authority (FTA)
    • collect excise tax from customers
    • Pay collected tax to the government
    • File excise tax returns with FTA
    • Comply with excise tax regulations
  • Non-compliance with excise law attracts fines and administrative penalties
Posted in TAX

Highlights Of Clarification On “Zero Rating of Export Services”

Highlights of Clarification On “Zero Rating of Export Services”

Highlights of Clarification On “Zero Rating of Export Services”

  • The Clarification provides some relaxation to foreign companies as No VAT to them by UAE suppliers just because they have a branch in UAE which are not related with the supplies HO by UAE suppliers.
  • It is also clarified that in determining the location of recipient, only physical presence of the recipient during the periods in which supplier perform services needs to be taken into account
  • The UAT does not recognize any other state as an “implementing state” for the purpose of VAT is also cleared through the clarification.

Eligibility and Benefits of holding Tax Residence Certificate

Eligibility and Benefits of holding Tax Residence Certificate in UAE

TAX Residence Certificate in UAE

  • Tax Residence Certificate can be obtained by an individual who is resident in UAE for period more than 180 days and companies which are registered and operates in UAE for minimum one year.
  • Offshore companies cannot obtain Tax Residence Certificate . However offshore companies can apply for  tax exemption certificate.
  • By holding tax residence certificate in UAE, an individual or company can use advantage of double taxation treaties.
  • Tax residence certificate helps to overcome the difficulties relating to cross-border trade and investment flows
  • A foreign national individual can avoid income tax by identifying his tax residency status.

As Business Are Waiving Off And Shifting The Rent Liability To Support The Business Due To COVID-19, What Would Be The Tax Treatment For Rent Supplies?

TAX TREATMENT FOR RENT SUPPLIES

As Business Are Waiving Off And Shifting The Rent Liability To Support The Business Due To COVID-19,
What Would Be The Tax Treatment For Rent Supplies?

There Could Be Two Scenario

    • Waiver of Rent Payment
    • Extension of deadline for rent payment

    Waiver Of Rent Payment

    Example:- PRS LLC owns a commercial unit and leased out the same to ABC LLC for one year. PRS LLC waived the payment of rent for 3 months starting from April 2020.
    Waived off rent payment will be considered as reduction of supply value by way of discount and there will no VAT due

    Extension Of Deadline For Rent Payment

    Example:- PRS LLC owns a commercial unit and leased out the same to ABC LLC for one year. The rent payable in 4 cheque which is due on Jan 20, Apr 20, Jul 20 and Oct 20. PRS LLC extend the date of payment of rent for 3 months starting which is due on April 2020.
    Reporting of rent supplies will also delayed by 3 months in PRS LLC Vat return as rent will be due on July 2020 instead of April 2020

    Next Article >>

  • Posted in TAX

    Get Tax Compliance Report (TCR) And Be Ready To Face Tax Audit Anytime In Future.

    Tax audit-Kudos PRS

    What is Tax Audit ?

      • Examination of liability of a taxable person by the Federal Tax Authority (FTA)
      • Various laws have granted power to the FTA to conduct tax audits at its discretion after giving due notice to an organization.
      • The Audit can either be conducted at the premises of the business or the FTA may request that all necessary documentation be brought to its office or sent electronically.
      • The FTA gives notice of at least 5 days to a tax registered business prior to the Audit.
      • On completion of the Audit, the FTA will issue a report including the violations observed and the penalties to be paid by the business if any.

    How We Can Help ?


  • We Ensure Your Tax Compliance In Order To Avoid Penalties And Loss Of Reputation.
    Tax Compliance Report (TCR) Covers,

      • Review the VAT Returns already filed for the previous periods

      • Review the existing contracts with Suppliers / Customers / Third parties on sample basis

      • Analyze the VAT treatment on Imports / Reverse Charge Mechanism

      • Analyze the VAT treatment on Exports

      • Analyze the VAT treatment on import of services, including the disclosures in the VAT Return Form 201

      • Review the existing accounting system to identify the VAT non compliances if any and provide guidance to make necessary changes

      • Guidance for VAT compliance as per the requirements of the industry will be given wherever we observe that present system has not captured the VAT Requirements.

      • Guidance for submitting VAT Refund through Form 311

  • Why You Need A Firm Instead Of An Employee To Do Your VAT/Taxation ?

    tax advisor in uae
    • The firm should be a Tax Agency approved by FTA.
    • A Dedicated division for VAT who are well versed and upto date on all latest developments, notifications and amendments from FTA
    • Taxation team handles different industries and complications so that their experience is surely more than an in-house employee who handles only one type of business.
    • Staff change by leave or resignation or termination will not affect you as the firm will be always there with you.
    • Timely filing of your tax returns to avoid penalties. Be ready to show the books and records to authorities.
    • Assess your tax liability accurately which will enable you to confidently face any queries or audit by FTA.
    • Assistance foryou to get eligible refund of VAT.
    • Advise complications on transactions during the course of your business.
    • Tax planning.
    • Keep your records confidential and hold ownership & responsibility of complete VAT compliance.
    • Training staff for handling tax transactions.

    • “Concentrate In Your Core Business When We Take Care Of Your Taxation.”

       

    Administrative Penalties for Violation Of Tax Laws in UAE

    Administrative Penalties for Violation Of Tax Laws in UAE

    Why You Should Be Prepared For VAT Audits In UAE

    Offences and Penalties Under TAX Law

     

      Sl.   No.

    Offences

    Penalties

    1)

    Failure to maintain books of accounts

    AED 10,000 for the first time

     AED 50,000 in case of repetition

    2)

    Failure to submit registration application within the specified time frame

    AED 20,000

    3)

    Failure to submit de-registration application within the specified time frame

    AED 10,000

    4)

    Failure to submit Tax Return within the specified time frame

    AED 1,000 for the first time

      AED 2,000 in case of repetition within 24 months

    5)

    Failure to pay due Tax within the specified time frame

     2% of unpaid tax is due immediately

      4% is due on the seventh day following the deadline for payment

      1% daily penalty charged on any amount that is still unpaid one   calendar month following the deadline for payment (Max 300%)

    6)

    Incorrect Tax Return by Registrant

    AED 3,000 for the first time

      AED 5,000 in case of repetition