VAT Registration
When any accounting firm in UAE starts a business, they are obligated to register themselves for Value Added Tax (VAT) with the Federal Tax Authority (FTA). VAT registration is compulsory for all taxable entities and is required for any company that performs services, sells goods and/or provides supplies and services in the country of UAE.
VAT registration is necessary for accounting firms because it allows them to charge their customers the applicable taxes on their services and be immune from government scrutiny. However, the process of VAT registration as per Federal tax laws is associated with various difficulties, including the gathering of documents, filing of applications and understanding of how to maintain compliance from the period of registration.
The first step towards VAT registration for an accounting firm in UAE is to get international tax code (ITC) from FTA. Once ITC is obtained, the accounting firm in UAE will have to submit an online VAT registration application form to the Federal Tax Authority. The online application form requires the accounting firms to provide detailed information such as the business’s legal name, VAT registration number, VAT legal address, VAT local address and VAT registration date, etc.
Once the online application is successfully submitted and approved, the accounting firm will receive a Tax Registration Number (TRN) which is mandatory to receive further communication from the authority.
The next step is to determine the taxable profit of the business, which is the total amount of revenue minus all eligible costs and expenses. Once the taxable profit is established, the accounting firm needs to calculate the applicable tax rate. The taxable rate depends on the number of services, supplies and sales the business does and will be specified in the VAT registration application form.
Once the application is successful, the accounting firm in UAE needs to periodically submit the periodic VAT returns. In order to properly maintain the business’s financial records for VAT returns, the accounting firm will need to maintain proper documentation of all sales, purchases, expenditure and also ensure that all pricing mentioned in the invoice includes the applicable VAT rate.
In addition to this, the accounting firm in UAE needs to ensure that they properly keep records of all transactions to ensure accuracy and compliance. The transactions should include the customer or supplier name, date and the invoice number.
In conclusion, obtaining VAT registration is necessary for any accounting firm in UAE in order to maintain a well-managed business and to provide a safe and lawful environment to the customers. The process of VAT registration involves a variety of procedures and documentation, and it is essential to consult a professional in order to better understand the rules and regulations.