Tag: VAT

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UAE Weekend changes: New Tax Deadline?

Impact on Tax return filing & Payments deadlines in the UAE

2022 NEW UAE WEEKEND for the public sector have officially been applied, as the country syncs its working weeks with the global market. Leaving off private sectors to decide on what best suits them. This is not the first time that such change has been made, and the good news is, this time its in favor of the employees. Having a four and a half day working week, with Saturday and Sunday full weekend days, flexible / half-day Friday working hours, and the Friday prayer held after 1:15pm.

There is no doubt that this weekend is going to boost business in the UAE, the stock market, and foreign trade as it will reduce the interruption between the world markets and the UAE weekend. As well as, this change is a huge benefit for employees, balancing out their work-life balance, so they feel happier, healthier and therefore more productive during working hours.

So what impact does this change have on Tax return filing, payments and other procedures?

  • Usually, tax payment and submitting tax returns due date is on the 28th day following the end of the tax period. So if the due date collides with a weekend / national holiday, the deadline is extended to the next working day.
  • If tax period due date falls on a weekend day, this could impact the deadlines for filing and tax payment.

Therefore, taxpayers should consider the new weekend impact on tax filing, payments, and other procedures due dates. Failing to meet the deadlines may result in penalties.

Important note: This months VAT filing in the UAE falls on – Friday 28th of January 2022

How can MSATC help?

  • Assist with the procedure and requirements of the law.
  • Filing the required information.
  • Assess whether the information needs to be updated/amended in anyway.

For any clarifications, you may contact our tax team.

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Blogs

Why Should You Maintain Records Under UAE VAT Law?

Under UAE VAT Law, it is specified that all tax registered individuals and businesses in the UAE should maintain their records in a way that enables the FTA to validate the data submitted for tax returns. It is required to maintain the records for a minimum of 5 years after the tax period, and records relating to real estate should be retained for at least 15 years from the end of the tax period to which they relate. 

What records must be kept?

  • Records of all supplies and Imports of Goods and Services.
  • All Tax Invoices and alternative documents related to receiving Goods or Services. 
  • All Tax Credit Notes and alternative documents received.
  • All Tax Invoices and alternative documents issued.
  • All Tax Credit Notes and alternative documents issued. 
  • Records of Goods and Services that have been disposed of or used for matters not related to Business, showing Taxes paid for the same. 
  • Records of Goods and Services purchased and for which the Input Tax was not deducted. 
  • Records of exported Goods and Services.
  • Records of adjustments or corrections made to accounts or Tax Invoices. 

Even though businesses in UAE have done record-keeping and maintained accounts and records for their internal reference in the past, VAT Law requires accounts and records to be mandatorily maintained. 

The failure of the person conducting Business to keep the required records and other information specified in the law would attract penalty for the taxable person.

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VAT Refund Scheme For Official Participants In EXPO 2020

The Federal Tax Authority introduced a Special Refund Scheme to reimburse VAT paid on goods and services for official participants in Expo 2020. All official participants regardless of their VAT registration status must obtain a “Certificate of Entitlement” from the Expo Bureau to be eligible for the VAT refund. The application to recover VAT incurred can be made by one of the following methods:

  • Where the Official Participant is not registered for UAE VAT, the refund applications can be made through the Bureau by submitting a special refund application to the Bureau.
  • Where the Official Participant is registered for VAT, it may reclaim VAT via its UAE VAT return.

What VAT is reclaimable

The Official Participants of Expo 2020 can reclaim VAT incurred on the import and acquisition of the following five categories of Goods or Services without the need to use them for making taxable supplies:

  1. VAT incurred by the Official Participant on Goods and Services in direct connection with the construction, installation, alteration, decoration, and dismantlement of their exhibition space.
  2. VAT incurred by the Official Participant on Goods and Services in direct connection with the works and activities of organizing and operating the Official Participant’s exhibition space and any presentations and events within the Expo 2020 site
  3. VAT incurred by the Official Participant on Goods and Services relating to the actual operations of the Official Participant, provided that the value of each Good or Service for which the Office of the Official Participant makes a claim is not less than AED 200.
  4. VAT incurred by the Official Participant in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 Dubai site; and
  5. VAT incurred on import of Goods for personal use of the Official Participant’s Section Commissioner-General, Section Staff and the Beneficiaries.

It should be noted that to be eligible to reclaim VAT on expenses under categories (1) and/or (2) (or expenses which relate to multiple categories including (1) or (2)), the Official Participant must be in possession of a Certificate of Entitlement issued by the Bureau. Where expenses do not relate to categories (1) and (2), and are covered by categories 3, 4 or 5 then a Certificate of Entitlement is not required to apply for a refund.

Eligibility Criteria for the Certificate of Entitlement

· The applicant must be an Official Participant of the Expo 2020 in Dubai, holding a valid Expo 2020 licence number.

 · Not more than 20% of the exhibition space or presentation is, has been, or is intended to be used for non-official or commercial purposes.

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INTRODUCTION OF VAT GUIDE FOR THE AUTOMOTIVE SECTOR

FTA has introduced a new guide on Automotive Sector in accordance with Article 73 of the Executive Regulation and provides general guidance in respect of the business activities within the automotive sector in the UAE.

The guide is applicable for supplies made by motor vehicle dealers in the UAE who deals with:

  • Supply of new cars.
  • Supply of used/ second-hand cars.
  • Leasing of cars.
  • Warranty Supplies.
  • Export and import of cars.

This is not a legally binding statement, but is intended to aid in understanding and applying the VAT.

Sale of Cars within the UAE

The sale of cars within the UAE is subjected to the standard rate of 5%. Sale of cars can be carried out by different types of agreements and in this guide the two most common types of agreements are discussed – Outright sales & Sales through hire purchase arrangements. The guide will explains the VAT implications in respect of the leasing of cars.

Key highlights of the Guide:

The guide contains clarifications and VAT implications upon the below mentioned scenarios:

  • Clarification on time of supply of Car Sales and Leased Cars.
  • Display prices for cars.
  • VAT treatment on Trade – ins of being two separate supplies.
  • Clarity on Profit Margin Scheme applicability.
  • Clarity on Salik reimbursement.
  • Various scenarios of Import and Export of Cars.

ACTIONS TO TAKE

We recommend all taxpayers who deals with the automotive sector to check out the newly released VAT guide and view the updated information in order to make informed decisions.

HOW MSATC CAN HELP?

  • Filing the required information.
  • Assist with timely and prompt advises through the process.
  • Advice on better compliance in UAE VAT law.
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News & Press Releases

GOOD NEWS!! REDUCTION AND DISCOUNTS OF TAX PENALTIES IN UAE

The UAE Cabinet of Ministers issued Decision No. 49/2021 amending provisions of Cabinet Decision No. 40/2017 regulating tax penalties, on 28th April 2021, the effective date being sixty days from the issuance date.

LET’S REVIEW THE HIGHLIGHTS:

  • Late payment penalties reduced from 1% per day to 4% per month.
  • 300% cap still applies.
  • New starting date for calculating late payment penalties.
  • Reductions for prior penalties to be made.

LATE TAX PAYMENT PENALTIES

The most notable of the new amendments is that is that the late payment penalties have been reduced from 1% per day to 4% per month.

The new calculation of late payment penalties, (with a cap of 300%) will be as follows:

  • 2% of the unpaid tax due on the day following the due date for payment.
  • 4% monthly penalty due after one month from the payment due date.

PENALTIES ON VOLUNTARY DISCLOSURE

  • Fixed Penalties for submitting VD’s for incorrect VAT and Excise Returns has also been reduced to AED 1,000 for First VD and AED 2,000 for subsequent VD’s.
  • Further reductions or waivers also allowed in specific cases.
  • Also, the percentage based penalties for difference in Tax Amounts resulting from VD’s has also been reduced.

DUE DATE FOR LATE PAYMENT PENALTY CALCULATION

The new Decision states that the due date for the purposes of calculating late payment penalties shall be:

  • In the case of voluntary declaration, 20 business days from the date of its submission.
  • In the case of tax assessment, 20 business days from the date of its receipt.

DISCOUNTS FOR PREVIOUS PENALTIES

The Federal Tax Authority shall define the administrative penalties imposed prior to the effective date thereof that have not been paid, so that they are equal to 30% of the total unpaid penalties, where the following conditions are met:

  • Any of the administrative penalties stipulated in Cabinet Resolution No. (40) of 2017 was imposed on the Registrant and has not been fully paid.
  • The registrant has paid the following:
  • The due and payable tax up to 31 December 2021 at most; and
  • 30% of the total payable administrative penalties unpaid until the effective date hereof up to 31 December 2021 at most.

HOW CAN MSATC HELP?

  • Check the consequences of delay/late payments or errors in the VAT Returns.
  • Ensure applicability of various provisions under the UAE VAT law.
  • Advice on the probable liability to the Authorities.
  • Suggest the best course of action in case of any liability to FTA.
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News & Press Releases

FTA Releases VAT Clarification On Adjustment On Account Of Bad Debt Relief

msatc-FTA-Releases-VAT-Clarification-uae

DOWNLOAD THE OFFICIAL FTA CLARIFICATION BY CLICKING HERE

VATP024-Adjustment-on-account-of-Bad-Debts-17-03-2021-1Download

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Four years of terrifically tireless, exceptionally elegant, abundantly assiduous work! MSATC celebrates its 4th Anniversary in Abu Dhabi !!

Four years ago, the mission has just started taking its form, the vision taking its shape!

When the founder C A Mohammed Shafeek, left his tax and advisory-focused position at a UAE based conglomerate, it marked a new beginning. A new start of the passion and the knowledge. Dream – of not just the founder, but now of many. The beginning!

The company got all set to unleash the power within entrepreneurs and businesses, with one fierce objective: to enable ambitious and driven individuals succeed.

The company has now approached its fourth Anniversary, with all the grueling efforts, accompanied by the hard work to the core and compassion in its bones. The celebration is not of one big achievement, but it’s a collection of achievements of all the businesses that we’ve helped shape, grow, change.

When the company grabbed a number of awards in the industry in UAE and multiplied in size expanding the client base, that’s not it. The company has equally celebrated the joyous victory of its clients, with the business acumen the company passed on, with the right decisions at the right time and with the impactful insights the clients have achieved in the last four years – The spark in their eyes is counted and treasured at M S Accounting and Tax Consultancy.

Our pace was defined by the pace with which we understood the client requirements and our ability to empathize. Clients always came first, if you know us, you know – we are truly obsessed with them!

The right team was built, leaders fed with passion, and employees gruelled with best training. It is always the satisfaction of the staff and employees. If they have found us, we have also found them! – A fabulous team.

As we reflect today, the challenges weren’t small, the growth wasn’t minimal, and so is the joy we share with the clients, directors and employees – it is tremendous!

MSATC is all about unlocking and unleashing the business force that can help you to break through any limit and create the quality of business that you desire and deserve.

We have planned it unique, executed it with a touch of innovation, and that’s the charm of the four years we have held high!

Humble beginnings kept us grounded and yet watching the limit beyond the sky. As we look forward to unparalleled success and unrivaled corporate services, on this fourth anniversary, we still count this as the beginning. Beginning of more to come, of the big vision with big dreams!

As we celebrate Four and we count for more to come, we urge you to dream more for your business!