The value-added tax (VAT) is a tax on the consumption or use of goods and services which was introduced in the UAE on 1st January 2018 by the rate of 5 percent. Under the current rule, businesses must register under the current law for filing a return and documenting their business information and VAT charges. This change has resulted in a price hike in the UAE. Business houses across the UAE have increased the prices of goods and services which come under the VAT system. Dubai has made this move in order to boost revenue and diversify the economy from oil dependence.
Dubai benefits from much higher tourism spending and population. It has even collected a large amount of tax among the seven emirates in 2018-2019. This has led to a GDP growth rate of 3.5 percent when the federal tax authority collected a large amount of revenue surpassing its target.
Vat registration in the UAE has made businesses responsible to seek professional help to maintain accounting records, filing tax on time and recording of invoices. Hire a consultant who will understand your business well and advice on account related issues.
Benefits of Hiring Consultants for Businesses
1. A consultant specialized in VAT Services is ideal for UAE based businesses to file financial details in the government record due to its complexity. VAT registration in UAE will help you in filing VAT returns on time to avoid penalties incurred by the Federal TAX Authority (FTA). A good consultant will be able to help you with running your company.
2. Hire a consultant who has knowledge about VAT related laws and can keep a record of goods and services imported and exported. A suitable consultant can understand the small issues impacting a company and save it from any kind of damage.
3. Hiring a consultant can help you in analyzing, assessment of human capital and measurement of the risk associated with the revenue and tax payments and save a lot of time. They are also responsible to estimate the net cost to the company after implementing VAT and compliance.
4. A good consultant understands the law on the basis of industry. For example, a consultant knows which sector has VAT applied and which has no VAT implementation. If the consultant is determined to run a company’s function smoothly by keeping business goals, model, operating structure and requirement in mind, it means you are hiring the right consultant.
5. A good consultant has efficient resources that have properly planned strategies in order to manage VAT with routine operations and minimum time spent with a goal of zero percent errors.
It is crucial for businesses to proceed with hiring a good accounting firm by searching through referrals and get a reliable accountant onboard to stick to the compliance and ever-changing rules to remain in the business.