Top Reasons Businesses Should be Serious about UAE VAT Compliance

Value Added Tax (VAT) was introduced in the UAE on January 1st 2018, which means five years have passed since its introduction in the country. Yet, it is saddening that many businesses fail to keep track of the compliance requirements only to be penalised. Lack of proper knowledge of the VAT requirements is one of the top reasons companies face the consequences of UAE VAT non-compliance.

Consulting with the best VAT consultants in Dubai is the most sensible solution to avoid VAT non-compliance. In this blog, we will enlighten you about the importance of adopting a more serious approach to VAT compliance. Given below are the top reasons why you must not ignore VAT compliance in the UAE:

Legal Requirements

The UAE VAT Law mandates that businesses must register for VAT if their taxable supplies and imports exceed the mandatory threshold of AED 375,000 per annum. You can also opt for voluntary VAT registration in the UAE if the taxable supplies exceed the threshold of AED 187,500 per annum. If your business meets the mandatory VAT threshold, you must not avoid registering for VAT in the UAE. Tax agents in Dubai can help you conduct VAT registration without any hassle.

Gain Competitive Advantage

By ensuring compliance with the UAE VAT Law, your business gets a competitive advantage as you can demonstrate your commitment to ethical and transparent business practices. It can also help you to build trust and credibility with authorities, customers and other stakeholders. Avail of VAT consulting services in Dubai to ensure hassle-free compliance.

Improve Financial Management

By complying with VAT requirements in the UAE, businesses can better manage their finances by ensuring that their accounting and reporting practices are accurate and up-to-date. It can improve their financial forecasting and planning, and help the business owners avoid potential cash flow problems.

Avoid VAT Administrative Penalties

Non-compliance with VAT regulations can result in hefty fines and penalties. By complying with VAT regulations, businesses can avoid these financial penalties and protect their bottom line. Failing to comply with the UAE VAT regulations can subject you to administrative penalties of up to AED 20,000. If you think your compliance is not adequate, seek assistance from experienced tax consultants in Dubai.

Reduce the Risk of FTA Tax Audits in the UAE

Tax registrants must always ensure that their level of compliance is up to the mark. Otherwise, they may be subject to tax audits by the Federal Tax Authority (FTA). Tax audits in the UAE are carried out by the FTA to examine whether or not the taxable person is complying with the provisions of the UAE VAT Law as well as the Tax Procedures Law.

During a tax audit, the FTA may examine the VAT returns and other relevant records & information. It is not necessary for the FTA to have a specific reason to audit a taxable person. A tax audit can be initiated by the FTA at any time or for any reason. However, the FTA is required by the Tax Procedures Law to notify the taxable person at least five days before the date of the tax audit. Conducting a VAT Health Check in the UAE can help businesses to reduce the risk of audits and other legal actions by demonstrating their adherence to regulations and ethical business practices.

Build Better Relationships with Authorities

Compliance with VAT regulations can help businesses to build better relationships with tax authorities, which can lead to smoother and more efficient interactions with government agencies.

Consult with the Best VAT Consultants in Dubai, UAE

Businesses should ensure VAT compliance in the UAE to avoid penalties and reduce the risk of FTA audits. Apart from that they can also build a better image before the FTA and the government by strictly complying with the provisions of the UAE VAT Law and the Tax Procedures Law. However, it is advisable to consult with the best VAT consultants in Dubai such as Jitendra Chartered Accountants (JCA) to make the process flawless and hassle-free. JCA is one of the most experienced tax consultants in Dubai with more than 21 years of experience in the industry. Our FTA-approved tax agents in Dubai can help you comply with requirements such as VAT registration, return filing, record keeping, financial reporting, VAT refunds and VAT health check services. Failing to ensure VAT compliance in the UAE is an offence that attracts hefty penalties, and therefore consult with JCA today to be on the right side of the tax law.