By Jahnavi Seth | 31^st Jan’23

The UAE Government is known for the rules and regulations that help the businesses here flourish. This is why the UAE is one of the most sought after places for doing business. This is due to the strategic location, the laws and the ease of doing business in the Emirates. 

However, the laws in the nation keep changing. Even though it is essential for the betterment of the business environment in the nation, it is also quite difficult to keep up with the changing laws and regulations especially if you are new in the nation. This is why you need to be in touch with a consultancy(experts in the region). A consultancy such as Projectfrpjsc can help you stay on top of your business. Read on to know one of the most recent changes in the UAE law.

The government of UAE has announced that the businesses in the UAE will now have to comply with a new law. This law states that attestation will be needed to authenticate import invoices of AED 10,000 or above. If someone fails to do so, they have to pay a non- compliance fine. This attestation will be done by the UAE Ministry of Foreign Affairs and International Cooperation also known as Mofaic.

A fee of AED 150 will be paid by the business per invoice. They will be granted a grace period of 14 days after the declaration of goods to complete the process. In case a company fails to do so, a fine will be paid by them.

A notification from Mofaic has declared that this law will be effective from 1st February, 2023. The law has been passed in accordance with Cabinet Resolution No. 38 of 2022. This addresses the certification of invoices and certificates of origin for imports into the UAE.

The attestation of the invoices will be done online. This attestation will be needed for any and every good that is imported in the UAE and cost more than AED 10,000 in order to prevent any sort of non- compliance fee. 

The businesses will be granted a grace period of 14 days from the deceleration of the goods. They will be required to pay AED 150 per invoice. Those who fail to do so will be required to pay a fine of AED 500. This fine will be levied per invoice according to Mofaic.

There are certain exemptions to the rule. These rules have been mentioned ahead. The goods that are lesser than AED 10,000 will be exempted from getting the invoice attested on import. Personal imports and goods imported from Gulf Cooperation Council countries will also be exempted. The goods that are bought into the free zones will also be counted in the exempted list. 

The law will not apply to B2C e-commerce transactions, transit goods imports, diplomatic, police, and military, charitable societies, and foreign organisation goods as well in addition to the above mentioned goods and services.

To ensure that the process is done with ease, the UAE Ministry of Foreign Affairs and International Cooperation has introduced an online procedure for the attestation of the invoices. This can be done by uploading the necessary documents online.  A reference number will also be provided to the person applying as a proof of attestation of the invoice. This reference number will be in the records of the UAE Custom systems. This will be done to make sure that the attestation is done before the import declaration. 

Attestation is done to confirm that the seal and signature on the said document is valid. It is done by the UAE government and even outside the nation. Many documents that are issued within the UAE are attested by the UAE Ministry of Foreign Affairs and International Cooperation. These documents also include the invoice of imports done over the value of AED 10,000. These invoices are nothing but any commercial documents with proof of sale of a good.

These attestations are done for companies inside as well as outside the United Arab Emirates. The attestation process is open through the portal at all times, i.e, 24*7. A person looking for attestation of documents can do so by heading to the Mofaic website or eDAS channel. 

The documents essential for the attestation of the import invoices are as follows:

• Commercial Invoice
• Certificate of Origin

The steps that one needs to follow in order to get your import invoices attested are below mentioned:

• Click on the start button 
• Login to the portal with the help of the company form 
• Register to the portal if you have not done so already 
• Complete the profile 
• Apply for the attestation through the portal 
• Fill the required form 
• Attach the invoice of the import 
• Pay the fees
• Receive the invoice digitally 

When importing the goods into the nation, it is essential to take care of the value of the imported products. If the value is over AED 10,000 then the business has to pay AED 150 per invoice. People often tend to get confused when it comes to new laws and regulations. It is therefore a wise decision to get help from a consultancy to ensure that you comply with the laws. 

This is when you should seek help from a company such as Projectfrpjsc. We can take care of your business’s compliance services while you handle the parts of business that you love the most. We ensure that you do not break any rule unknowingly and help you stay out of issues. Our experts are well trained and knowledgeable in their fields. Get an appointment with us today to get started with your business setup service in the UAE.

Written By Jahnavi- 31^st Jan’23

Written By Jahnavi- 20^th Jan’23

Is Your Company Eligible to Pay VAT in UAE? – Guidelines for Businesses in UAE

A firm that is registered under the VAT in UAE law is recognised by the government as a supplier of goods and services and is entitled to collect VAT from customers and submit it to the government. Only VAT-registered enterprises will be permitted to carry out the following activities:

• Value-added tax (VAT) is levied on taxable products and services.
• Input Tax Credits can be claimed for VAT paid on purchases, which will be subtracted from the VAT liability on sales.
• VAT is a tax that must be paid to the government.
• VAT returns must be filed on a regular basis.

Apart from that, all registered businesses must align their business reporting structure with compliance requirements, such as maintaining accurate and up-to-date books of accounts, tax-paid documents such as Tax invoices, credit notes, debit notes, and records of all inward and outward supplies, among other things.

As a result, one of the most critical aspects in your VAT preparation will be to learn the foundations of VAT, and acquiring VAT registration will be the first step in transitioning your organisation to the VAT era.

Who should register under VAT?

Is it mandatory for all firms to register for VAT? No, only enterprises with an annual aggregate turnover of more than a certain amount are required to register for VAT. A business will either be required to register or will have the option of applying for registration or seeking exemption from VAT registration, depending on the registration threshold.

VAT registration in the UAE can be categorised into the following categories based on this:

• Registration for VAT is required.
• VAT Registration on a voluntary basis
• Registration for VAT exemption

VAT turnover calculation for Registration in UAE

In UAE VAT, businesses whose annual turnover exceeds the mandatory registration threshold of AED 375,000 and the voluntary registration threshold of AED 187,500 are allowed to apply for VAT registration. Therefore, it is crucial for businesses to understand what type of supplies are considered in deriving the annual supplies turnover and how to calculate the VAT turnover for registration in UAE.

How to apply for VAT registration in UAE

Businesses with a revenue of more than AED 375,000 in the UAE are required to register for VAT. The Federal Tax Authority (FTA) has created an online VAT registration gateway to make it easier for firms to register. FTA has already stated the timeframes based on business turnover, and registration will be done in stages. While it is critical for businesses to understand their VAT registration obligations, they must also understand how to apply for VAT registration and the degree of information required to complete the online registration procedure.

• Creation of e-Service Account
• Login to your e-Service Account
• VAT Registration Form: The online VAT registration form contains 8 sections as shown below, in under which the details need to be furnished for completing VAT registration
  • About the applicant
  • Details of the applicant
  • Contact details
  • Banking details
  • Business relationships
  • About the VAT registration
  • Declaration
  • Review & submit

VAT group registration

Unless otherwise specified in the UAE Executive Regulation, any person conducting business in the UAE is not permitted to hold more than one Tax Registration Number (TRN). As a result, even if you have branches in multiple Emirates, you only need one VAT registration. With a similar goal in mind, if two or more people in a firm are related or associated, they can apply for VAT group registration.

How can Radiant Biz help?

In matters like business setup in Dubai, people tend to get confused and get in chaos due to several rules, regulations, and multiple requirements. This is the time when people tend to look for an expert. A lot of chaos can be avoided if guidance is taken from the initial state of the commencement of the business. Every venture may have unique requirements like location, customer convenience, logistical feasibility, and banking services.

We at Radiant Biz strive to understand these unique precepts and provide expert and reliable consultation to our clients with updated laws and governing regulations, awareness of their rights, and cost-effective business solutions tailor-made to their business needs and budget.

Projectfrpjsc has a variety of packages for clients who intend to stay in the area for a long time. Expats and foreigners can get long-term visas and have their visas renewed with the help of the firm.

Pre-investment business advising services on legal structuring, licencing, and regulatory problems are also available. This can involve assistance with obtaining professional, trade, or industrial licences, as well as other services.

VAT in Abu Dhabi, other parts of UAE stands for value added tax and was introduced in UAE on 1st January 2018. The rate is 5 percent. It is considered a new source of income for the UAE. It will be utilized to provide high quality services to the public. It reduces the dependence of revenue on oil and other hydrocarbons.

Requirements for VAT Registration in Abu Dhabi and other Parts

Registration for VAT in Abu Dhabi and other parts of the UAE is compulsory if the taxable goods and other imports cross AED 375000 per annum. Registration for business setup service with imports and supplies exceeding AED 187500 per annum is optional.

How to Register for VAT in Abu Dhabi?

VAT Registration in Abu Dhabi can be done on the eServices section on the FTA website by creating an account first. VAT Registration User Guide provides detailed information on the same.

How is VAT collected?

Businesses registered with VAT collect the tax on behalf of the government. A 5 % increase in the cost of the goods is the VAT that the customers bear on the taxable goods in Abu Dhabi and other parts of the UAE as well. VAT registered company setup in Abu Dhabi pay 5 percent on supply of goods and services at every step of the supply chain. Tourists of Abu Dhabi are also required to pay VAT.

On which businesses VAT in Abu Dhabi apply?

VAT is applied on tax related businesses in Abu Dhabi Mainland or Abu Dhabi free zones. Goods transfer between the designated zones are tax free.

Filing a return for VAT

VAT registered business setup in UAE and people have to submit a ‘VAT Return’ to Federal Tax Authority at the end of each tax period. It summarizes the purchases made and show’s the person’s VAT liability.

Liability of VAT

Liability of VAT is the difference between the VAT charged and the VAT incurred on purchases in the same tax period. The former value is known as the output tax and the later as the input tax.

When the Input tax exceeds the output tax the person is entitled to set the excess tax recovered off against subsequent payment due to FTA. In case the opposite happens, the difference has to be paid to FTA.

How to file a VAT return?

A person or business needs to meet all the requirements for tax returns before filling the VAT return by filling the form. The form needs to be filled at the FTA portal online.

When do businesses need to file VAT returns?

Taxable businesses need to file for VAT returns within 28 days of the end of the tax period. The tax period defined for each type of business is different and according to the VAT that needs to be paid.

VAT return needs to be filled quarterly for businesses that have below AED150 million turn over per annum VAT return needs to be filled monthly for businesses that have AED150 million or above turn over per annum The FTA can allot a different tax period according to its choice for a certain type of business.

Not being able to file the VAT in a given time period is an offense and can lead to heavy penalties.

Implications of VAT

There are implications of VAT on individuals as the cost of living has increased depending on an individual’s lifestyle.

The implication on company registration in UAE is that it is now necessary to document every cost related to VAT charges. They must charge VAT on taxable services provided by them regularly.

This amount must be reported and paid to the government regularly. The reporting for the same is done in online mode.