Since the introduction of Value Added Tax (VAT), a number of small- to medium-sized enterprises find it difficult to cope with the newly introduced VAT system, thus attracting fines.
Most common mistakes made by small & medium companies when vat return filing in UAE:
- Non-maintenance of records
- Mistakes in simply calculating and paying VAT e.g. failing to file the appropriate amounts
- Poor planning
- The hiring of the wrong resources
- Failure to issue valid tax invoices
- Limited understanding of VAT laws
- Not having the right accounting setup
Lots of mistakes have been observed related to the input tax deduction due to the misinterpretation of the VAT legislation. The VAT legislation only allows reclaiming input VAT paid to suppliers of goods and services that have been used to make taxable sales.
Mistakes regarding maintenance of VAT records that are most common are as follows:
- Non-filing of VAT return in UAE;
- Failure to issue valid tax invoices and VAT credit notes;
- Non-maintenance of all records and documents as per the requirements of the UAE VAT law;
- Delay in amending the VAT Registration in Dubai on account of addition in branches;
- Recovery of input tax pertaining to blocked expenses
Companies should take a thorough review of compliances undertaken and the positions adopted for the last 18 months, create VAT governance framework with proper roles and responsibilities defined for team members. Appoint tax experts for periodic review of tax positions and VAT returns, upgrade IT setup to meet the record-keeping requiring and train to the users.
Being compliant requires constant follow-up of matters and dedicated staff. It is not enough to add tasks to the current tasks of finance managers or controllers. A more holistic approach is required. Although an accountant may have good operational knowledge, he might come short in the legal analysis.
It is very important to train the staff and follows the best tax practices, change their core processes and adapt the accounting systems to achieve a reasonable degree for tax compliance.
The audit and advisory future are undergoing some digital transformation, which is greatly needed in order to provide the businesses of the future meaningful analytics, deliver additional value-added services, it is important to improve internal efficiency and the quality of audit.
VAT filing is an important part of any business if you have any of the facts that are not feline contact experts, they will help to properly file your returns. VAT return filing requires several documentation processes which can be complicated to organize and submit in accordance with Federal tax authority regulations. Our business experts would start from the very scratch and make it much easier to deal with.
VAT return filing in Dubai is highly recommended for you to have a flawless and on-time submission.