FAQ

Samples of excise goods that are given away for free will also be subject to excise tax. Excise tax is not a transaction based tax so tax is due on the goods when they are released for consumption (i.e. enter free circulation) in the UAE, regardless of whether or not they are intended for sale.

The following goods are subject to excise tax in UAE at the following rates of tax:

Carbonated drinks – 50%
Energy drinks – 100%
Tobacco – 100%

A stockpiler is a person that owns excise goods and cannot prove that excise tax has previously been paid on those goods.Stock is the most important asset for all businesses. It is mandatory for any businesses that are keeping a stock or inventory to ensure the accuracy of the stock. The purpose of stock audit services is to ensure the statistics of stock through proper analytical accounting of the stock and inventory.

A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.

A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.

Similarly, a business may register voluntarily if its expenses exceed the voluntary registration threshold. This latter opportunity to register voluntarily is designed to enable start-up businesses with no turnover to register for VAT.

A designated zone is the term used in the UAE to describe a specified area that is considered outside the UAE for excise tax purposes.

For an area to be treated as a designated zone, it must be officially registered and approved by the FTA and a warehouse keeper must be appointed as responsible over the designated zone.

A designated zone should be a fenced area intended to be a free zone that cannot be entered or exited except through a designated road and any area designated by the FTA as being subject to the supervision of a warehouse keeper.Learn more about the list of designated zones in UAE.

Unlike VAT, excise tax is paid once in the supply chain and businesses that have purchased excise goods cannot obtain a refund of the excise tax paid on those goods.

There are a limited number of cases where a refund of excise tax will be available. Those cases are:

a) When excise tax has been paid on an excise good, which is then produced in to a ‘new’ excise good, on which excise tax is again due;

b) When excise tax has been paid on an excise good that is then exported outside the UAE; or

c) When amounts have been paid to the FTA in error.

In the above cases, a business registered for excise tax will be entitled to a refund of the excise tax paid. The refund will be granted by allowing a deduction of the refundable amount from the tax due in the next excise tax return period.

There are also a limited number of cases where refunds will be available to people who are not registered for excise tax. Those cases are:

a) Where excise tax has been paid by certain international governments, diplomatic missions and international organisations in the course of their official activities, where a reciprocal agreement is in place between the UAE and the entity’s home country; and

b) Where excise tax has been paid in the UAE by a person who is registered for excise tax in another GCC country that is implementing excise tax and who has then exported the excise goods out of the UAE and paid excise tax in that other GCC country.

VAT-registered businesses generally:

a) must charge VAT on taxable goods or services they supply;

b) may reclaim any VAT they have paid on business-related goods or services;

c) keep a range of VAT related business records (e.g. Tax invoices);

d) report their taxable supplies and purchases in periodic VAT returns.

No. Imported goods may be exempt from customs duties but still be subject to VAT.

Businesses will need to complete additional information on their VAT returns to report revenues earned in each Emirate.

Further detail on this can be found in the Executive Regulation of the Federal Decree-Law No. (8) of 2017 on Value Added Tax.

Taxable Persons or Businesses must file VAT returns with the FTA on a regular basis, within 28 days of the end of the Tax Period.

The Tax returns shall be filed online using e-Services.

VAT is due on the goods and services purchased from abroad.

In case the recipient in the State is a registered person with the Federal Tax Authority for VAT purposes, VAT would be due on that import using a reverse charge mechanism.

In case the recipient in the State is a non-registered person for VAT purposes, VAT would need to be paid before the goods are released to the person.

Any taxable person or a business must retain VAT invoices issued and received for a minimum of 5 years.There is a certain template or a VAT invoice format which all the businesses must follow to ensure VAT compliance.

Supplies made by government entities will typically be subject to VAT. This will ensure that government entities are not unfairly advantaged as compared to private businesses.

Certain supplies made by government entities will, however, be excluded from the scope of VAT if they are not in competition with the private sector or where the entity is the sole provider of such supplies. It is likely that certain government entities will be entitled to VAT refunds.

For the supplies provided for government entities, the treatment of such supplies shall depend on the same supply and not on the recipient of the supply. Therefore, if the supply is subject to the standard rate, the treatment would remain the same even if it is provided to a government entity.

Validation will be available 24/7 and refund desks will be open at major airports 24/7.

You can find a list of cash refund points on planet www.payment.ae. Planet will process credit or debit card refunds.

Non-residents that make taxable supplies in the UAE will be required to register for VAT unless there is any other UAE resident person who is responsible for accounting for VAT on these supplies.

A registered taxable person must issue a valid VAT invoice for its taxable supplies. To be considered as a valid VAT invoice, the document must include certain particulars as mentioned in the legislation.

In certain situations the supplier may be able to issue a simplified VAT invoice. The conditions for the VAT invoice and the simplified VAT invoice are mentioned in the legislation.

VAT Refunds will be made after the receipt of the application and subject to verification checks, with a particular focus on avoiding fraud.

Accounting is the concept used to define an organization’s financial activities in depth and routinely. There are also various kinds of businesses, audit accounts, administration accounts, policy accounting, and small to medium-sized firms. This is the way the company tracks the financial documents, organizes them, and knows them.

Accounting services show you whether you earn a profit or not, what your cash balance is, how what the company’s assets and liabilities really are worth, and which aspects of the corporation really generate profits.

VAT on E-commerce sales in UAE depends on the location of supplier and recipient. 5% VAT will be applicable on online sales in UAE.

As per Federal Tax Authority (FTA), companies or individuals having annual turnover of AED 375,000 or more must apply for VAT registration and must get Tax Registration Number (TRN) in order to run business in UAE. They must implement VAT and must collect VAT on behalf of FTA. This is called Mandatory VAT registration in UAE.

As per Federal Tax Authority (FTA), companies or individuals having annual turnover of more than AED 187,500 but less than AED 375,000 can voluntarily apply for VAT Registration and they get Tax Registration Number (TRN) voluntarily. It is totally up to the company if they want to register or do no want to register. In both cases, there will not be any issue.

If your products are shipped from outside of UAE, the recipient of the product may be required to pay, upon delivery, an amount related to assessed import VAT, and other import taxes or duties. Such taxes and duties are in addition to the sales proceeds collected by Amazon.

As a seller on Amazon, it is your responsibility to comply with the VAT Law at all times. This includes issuing valid tax invoices for sales made to customers, collecting VAT (if applicable) and payment of VAT to the UAE Federal Tax Authority (“FTA”).It is your sole responsibility to comply with all legal and VAT requirements for issuing Tax Invoices to buyers in respect of your sales transactions. If you are unsure as to whether you have to issue a Tax Invoice to the buyer, we recommend that your consult with your tax advisor.

In case of return orders for which a refund is authorized to the customer, you are required to provide the customer with a valid Tax credit note.

Yes. If you are a non-UAE resident selling goods that are located in the UAE to a UAE customer, then you will be required to register for VAT irrespective of the level of turnover from such sales.A non-established business selling goods from the UAE shall be subject to a NIL VAT registration threshold. VAT registration will be effective from the date on which you started making sales in the UAE.

Your task is choosing the best audit firms in Dubai which makes a significant impact on your business—and certifies that your finances are well-managed—because that can make or break your business. Hiring a reliable, qualified, and reputable auditing firm is one of the best things you can do for protecting and promoting your business.Selecting your auditing firm is an important task and must be done carefully. You need to appoint an audit firm that adds value to your business by identifying wrongdoings, staff weaknesses, and internal control weaknesses. Most importantly, you need a firm that provides recommendations to address the issues identified during the audit.

New VAT fines and penalties have been announced and the good new is that FTA has reduced them to help businesses to recover from the impact of COVID-19. FTA has reduced the penalties on VAT to motivate the businesses to avoid fines by ensuring VAT compliance. The amendments will be effective from 28 June 2021.Read more: VAT fines and penalties

Businesses are confused about how to treat discounts under VAT in UAE. As per FTA, VAT will be calculated on discounted prices in UAE. Discount is often used as a sales strategy by businesses to attract their customers. A Discount is referred as a reduction in price.

YES! Outsourced accounting services in UAE means hiring an accounting firm that provides a full accounting department experience. This usually comprises everything from the day-to-day transaction coding, accounts receivable, accounts payable, payroll and taxation to managing financial reporting.Small businesses in UAE face many challenges in the early stages of their business. Hiring a full time dedicated accountant is very costly in UAE because a business needs to provide the accountant with company visa, health insurance, travel ticket and monthly salary along with the integration of a suitable accounting software. Businesses in UAE can avoid all this cost by just outsourcing accounting services for their small business in Dubai, UAE.

Corporate Tax For Free Zone Companies in UAECorporate Tax For Free Zone Companies in UAE with qualifying income will be 0%. Corporate Tax For Free Zone Companies with non qualifying income will be 9%. As per the law, businesses will be liable for corporate tax in UAE from the beginning of their financial year, starting on or after June 1, 2023.

The UAE Corporate tax registration applies to all businesses whether they are subject to 0 percent or 9 percent corporate tax. We are offering best and hassle free corporate tax registration services in UAE. In order to apply for the corporate tax number, certain set of documents required for corporate tax registration in UAE. All the companies in UAE must register for Corporate Tax in UAE.

UAE set to impose 9% corporate tax starting June 1, 2023. Corporate Tax in UAE will be applied on the adjusted accounting net profits of a business above 375,000 AED. Businesses will only need to file one corporate tax return each financial year and will not be required to make advance tax payments or prepare provisional tax returns.

Following are the Corporate Tax Rates in UAE:
0% for taxable income up to AED 375,000;
9% for taxable income above AED 375,000;
15% rate for large international multi-nationals (with global revenues of more than AED3.15 billion)

Any UAE resident taxable person with revenues below the Dh3 million threshold and meeting other conditions can claim the Small Business Relief in UAE by electing not to derive any “taxable income” during the relevant tax period.

Businesses in the UAE must adhere to the corporate tax laws to avoid corporate tax fines and penalties in UAEcorporate tax fines and penalties in UAE. All the companies in UAE including mainland and free zone companies must apply for the corporate tax registration and make timely payments in order to avoid UAE corporate tax fines.

Accounting and bookkeeping services in Dubai are extremely important and mandatory for all the businesses in UAE irrespective of the size of the company.As per the UAE government, it is mandatory for all the businesses in UAE to maintain the books of accounts in a proper and standard way. All the financial transactions of the company must be recorded in a systematic and comprehensive method.

Companies in UAE will be required to file a corporate tax return only once a year as per the tax period mentioned on the corporate tax registration certificate. Xact Auditing is offering best and reliable corporate tax return filing services in UAE.

The Tax Residency certificate UAE is valid for one year from the beginning of the financial year selected by the applicant