With the introduction of Value Added Tax (VAT) in UAE, there is a lot of speculation about it. Everyone seems to have an opinion about it, but still, there a lot of debate in the minds of business owners and customers. This article is an effort to throw light on some of the most important things that you need to know about VAT in UAE.
Who Should Register For VAT? The primary concern that most people have when it comes to VAT is that who should register for it. The following points will help you in clarifying that.
It is voluntary for businesses having an annual turnover that is more than Dh187,500.
Businesses that have an annual turnover that is equal to or more than Dh375,000 should have applied for VAT before the 4th of December, 2017.
Businesses that have an annual turnover between Dh 10 million to DH150 million should have registered by the 30th of November 2017.
Any business that has an annual turnover of Dh150 million or more should have registered before the 31st of October 2017.
Where Should Companies Using FMCG Billing Software Register For VAT?
The registration for VAT is effortless and it can be done online. The website to register for VAT is https://www.thevatuae.com/vat-registration/
What Are The VAT Rates? The VAT Rates are categorized into three segments.
Zero Rate: Under this category, the VAT is applicable on the goods, but the rate of the VAT that businesses or individuals collect from the customer is 0%. Organizations have to record this VAT in their accounts and report them in the tax returns filed.
Standard Rate: Under the Standard rate section, every business and individual should pay 5% VAT on the sale and purchase of goods and services.
Exempted: As the name indicates, any business or individual who comes under this section does not have to pay VAT.
VAT Flow In Wondersoft’s Shopaid and eShopaid
In order to incorporate this VAT into the billing, here are a few changes that Wondersoft’s Shopaid and eShopaid underwent.
1.Inclusion of 11 digit VAT number into a) Store Master to save the Store’s VAT number. b) Branch/Franchise Store Master to add the Branch/Franchise Store’s VAT number. c) Supplier Master to save the Supplier’s VAT number. d) Customer Master to save the Customer’s VAT number.
2. Update the VAT that applies to all the products that are listed. 3. The inclusion of VAT in the calculation of purchases. 4. The inclusion of VAT in summary for billing. 5. Addition of Sales returns in the VAT. 6. VAT reports giving analysis for the filing of the VAT.
VAT, though looks very difficult on the onset, would become a routine in due course. It’s the initial phase that will be challenging, but once we become a part of the system, then it would be as simple as ABC.