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VAT Obligations of a UAE Company

 

In the UAE, companies are required to comply with Value Added Tax (VAT) obligations in accordance with the Federal Tax Authority (FTA) regulations. 

Some key VAT obligations for a UAE company include:

 

1. Registration: Companies with an annual turnover exceeding the mandatory threshold of AED 375,000 must register for VAT with the FTA. Voluntary registration is also allowed for companies with an annual turnover between AED 187,500 and AED 375,000.

 

2. Charging VAT: Registered companies must charge VAT on taxable supplies at the standard rate of 5%. They are required to issue tax invoices that comply with FTA regulations and clearly show the VAT amount.

 

3. Filing VAT returns: VAT-registered companies are required to file periodic VAT returns with the FTA, usually on a quarterly basis. The VAT return should include details of taxable supplies, input tax, and payable tax.

 

4. Recordkeeping: Companies must maintain accurate records of all transactions, including invoices, receipts, and VAT calculations, for a minimum period of 5 years. These records must be made available to the FTA upon request.

 

5. Compliance with VAT laws: Companies must ensure compliance with all VAT laws and regulations, including proper invoicing, reporting, and payment of VAT. Non-compliance with VAT obligations may result in penalties and fines imposed by the FTA.

 

It is important for UAE companies to understand and fulfil their VAT obligations to avoid any potential legal or financial consequences. Chrysalis Serve tax consultant can help you to ensure compliance with VAT regulations.