After a year of implementation, many companies in the UAE have smoothly adjusted to the existence of tax along the running of businesses. However, many are still adjusting and adapting the new system in their businesses and the need for proper tax accounting in the UAE – commonly for new entities.
VAT is not a cost to the business. Instead, it is a cost to the consumers of good and services. The business acts as a tax agent to collect and remit taxes to the government. The tax amount that is collected upon sales is payable to the government while the tax that is paid on the account of purchase is an amount receivable from the government.
Companies must keep close record of the VAT that they charge and VAT that they pay on purchases. The taxation laws require companies to maintain number of records and information. This enables the companies to have accurate records needed when the time for filing VAT Returns come. Furthermore, these documents will be helpful in time of VAT audit by government agencies. The list of accounts and nomenclature is not specified in VAT rules. However, these maintained documentation records are required for VAT filing.
TOTAL SALES: Local sales, export sales; and exempted sales; and
TOTAL PURCHASE: Local purchases; import purchases
VAT Accounting for Businesses
VAT is a transaction tax making which significantly affects processes in companies. Business’ need for professional VAT accounting arise in particularly detailed tasks such as VAT recording and reporting, sales and purchase schemes for accounting entries, tax coding for transactions, inventory masters, etc.
During this period where so many companies are still adapting to the implemented VAT procedure and tax accounting, it is best to seek the help of certified professionals or an accredited tax consultancy company to avoid penalties and financial damages.
SDAC Consulting DMCC assists businesses with tax accounting services and in creating a system to manage their accounting needs. Our business consulting services includes making sure that our clients are in compliance with tax laws. Failure to follow tax laws can result to hefty fines by the Federal Tax Authority. Our wide range of tax and consultancy services cover helping companies with requirements to tax compliance, VAT accounting, and VAT functions within the business. In addition, we help a range of services including bookkeeping and VAT consultancy; strategic planning; and corporate management.
Get in touch with us for your tax and accounting needs at email@example.com or click HERE to book a complimentary consultancy session.