Quest Management is a reputable business consulting firm based in the United Arab Emirates. With over a decade of experience in the industry, the firm has gained a wealth of knowledge and expertise in various aspects of company registration. Whether it's vat registration, bank assistance, audits, investments, or professional services, Quest Management can provide comprehensive assistance to companies operating in both mainland and free zone authorities.
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VAT CONSULTANCY:
Managing VAT obligations in the UAE poses ongoing challenges for businesses. As VAT legislation is expected to evolve over time, businesses will need to adapt accordingly. Changes in business scenarios, such as introducing new services or altering supply-chain structures, will require VAT impact assessments and guidance from qualified Tax Agents approved by the FTA.
At Qromozone, we understand the complexities of VAT compliance and offer client-focused Consultancy services. Our dedicated VAT team provides a comprehensive range of services, including health checks to assess your current tax position, review of internal controls and procedures, drafting clarifications for the FTA, ongoing Consultancy and compliance assistance through retainership services, and training for in-house personnel to stay updated on VAT changes.
With our expertise and experience, we can help businesses navigate the dynamic landscape of VAT in the UAE, ensuring compliance and minimizing any potential risks or penalties. Our mission is to deliver holistic VAT services, encompassing all aspects of the business. As one of Dubai's prominent VAT consultants, our approach is to provide comprehensive support to businesses throughout the setup of VAT practices and ongoing compliance.
United Arab Emirates (UAE): Amendments to the VAT Decree Law under Federal Decree Law No. 18 of 2022
On 26 September 2022, the President of the UAE, H.H. Sheikh Mohamed Bin Zayed Al Nahyan issued the Federal Decree-Law No.18 2022 amending some provisions of the Federal Decree-Law No. 8 2017 on Value Added Tax (the VAT Law). The amendments will take effect from 1 January 2023.
Changes in Definitions
The new VAT Law in the UAE has made some changes in the definitions of tax-related items. New definitions were introduced for Relevant Charitable Activity, Pure Hydrocarbons, Tax Evasion, Tax Audit, Tax Assessment and Voluntary Disclosure.
Supplies outside the scope of VAT
A new clause has been added to Article 7 that states the Executive Regulations may stipulate any other supplies (other than the supply of vouchers and the transfer of a business) that are explicitly considered outside the scope of VAT
Exception from VAT Registration
Article 15 of the UAE VAT Law states that:
“The Authority may exempt ? a Taxable Person from Tax Registration whether a Registrant or not, upon his request if his supplies are only subject to the zero rate”.
Date of Supply in Special Cases
Article 26 (1) of the UAE VAT Law is about determining the date of supply in special cases. As per Article 26 (1) of the UAE VAT Law. “The date of supply of Goods or Services for any contract that includes periodic payments or consecutive invoices shall be the earliest of any of the following dates:
i.The date of issuance of any Tax Invoice
ii.The date payment is due as specified on the Tax Invoice
iii.The date of receipt of payment
iv.The date of expiration of one year from the date the Goods or Services were provided”
Place of Supply in Special Cases
Article 30(8) regarding the place of supply in special cases now includes a major change in transport-related services. Article 30 (8) states that:
“For the supply of transportation Services or Transport-related Services, the place of supply shall be where the transportation starts.
The Executive Regulation of this Decree-Law shall specify the place of supply for transportation Services and Transport-related Services if the trip includes more than one stop”
Place of Residence of a Principal
Article 33 of the amended UAE VAT Decree-Law defines the place of residence of a principal as the place of residence of the agent. This is different from the current VAT Law, which states that the place of residence of the agent shall be the place of residence of the principal.
“The Place of Residence of the principal shall be considered as being the Place of Residence of the agent in any of the following cases:
i.If the agent regularly exercises the right of negotiation and enters into agreements in favour of the principal.
ii.If the agent maintains a stock of Goods to fulfil supply agreements for the principal regularly.”
Recovery of Input VAT
Article 36 for the value of supply or import of goods and services between related parties will now override Article 37 (value of deemed supply). Article 36 states:
“The value of the supply or Import of Goods or Services between Related Parties shall be considered equal to the market value if all of the following conditions are met:
i.The value of the supply is less than the market value
ii.If the supply is a Taxable Supply and the Recipient of Goods or Recipient of Services does not have the right to recover the full Tax that would have been charged on such supply as Input Tax”
Goods Subject to Zero-Rate
Article 45 of the new UAE VAT Law has introduced additional goods that are subject to zero-rate of VAT. This include
“ Supply or Import of air, sea and land means of transport for the transportation of passengers and Goods as per the criteria and conditions specified in the Executive Regulation of this Decree-Law (Article 4).
Supply of Goods or Services, or Import of Concerned Goods, related to the supply of the means of transport mentioned in Clause 4 of this Article and which are designated for the operation, repair, maintenance or conversion of these means of transport (Article 5)
Supply or Import of air or sea rescue and assistance aircraft or vessels (Article 5)”
Recovery of Input VAT
The new UAE VAT Law states that government entities can recover input VAT incurred for the provision of sovereign activities. Charitable organisations can also recover input VAT incurred for the provision of relevant charitable activities. As per Article 57:
“Without prejudice to the general provisions of Input Tax recovery, Government Entities and Charities entitled to recover the full amount of Input Tax shall be determined in a Cabinet Decision issued upon the recommendation of the Minister, according to the following:
i. Input Tax paid by the Government Entity for the purposes of its Sovereign Activities.
ii.Input Tax paid by the Charity for the purposes of its Relevant Charitable Activity.”
Reverse Charge Mechanism
Clause 3 of Article 48 specifies that the domestic reverse charge will apply to Pure Hydrocarbons (defined in the new Decree-Law as “any kind of different pure combinations of a chemical equation made only of hydrogen and carbon”).
Recovery of Input VAT
Article 55 of the VAT Law now contains two new clauses regarding the recovery of input tax. It specifies the requirements for the taxable person to recover VAT paid or declared on the import of goods or services.
Output VAT Adjustment
Output VAT can be adjusted if the taxable person applies an incorrect tax treatment, which is a new scenario in the VAT Law (Article 61 (1)).
However, in such situations, the taxable person must issue a tax credit note to adjust the output tax (Article 62 (2)).
Payment of Tax
Article 65(4) states that “Any Person receiving an amount as Tax or issuing a Tax Invoice in respect of an amount, must pay such amount to the Authority, and this amount shall be regarded as being similar to Due Tax under the provisions of this Decree-Law.”
Timeline to issue a tax credit note
Article 62(2) regarding the mechanism for output VAT adjustment now attaches a condition that the taxable person must issue a tax credit note within 14 days from the date on which any of the instances provided in Article 61(1) occurs.
Timeline to issue a tax invoice
Article 67(1) specified the date of issuance of tax invoice under Article 26 (date of continuous supply) to be 14 days from the date of the supply.
Tailored Financial Solutions
Qromozone provides customized financial solutions designed to meet the unique needs of each customer. From accounting and bookkeeping to tax planning and compliance services, we offer personalized support to help optimize your financial operations
Expert Guidance And Consulting
Our team of experienced professionals offers expert guidance and consulting services to assist customers in making informed financial decisions. Whether you need assistance with corporate tax planning or VAT advisory, we provide valuable insights and recommendations tailored to your specific business goals.
Reliable and efficient services
At Qromozone, we prioritize reliability and efficiency in delivering our services. With a commitment to accuracy and timely execution, we ensure that our customers receive top-quality assistance and support to navigate the complexities of financial regulations and achieve their financial objectives.
Effective Solutions
Seeking VAT consultancy can be a daunting task, especially in international markets. Qromozone recognizes the complexities of VAT regulations and provides tailored solutions for businesses expanding their operations in the Middle East. Our expertise simplifies the process, ensuring compliance and optimized VAT strategies for your business growth.
VAT Registration and Compliance:
Qromozone offers effective solutions for VAT registration and compliance. Our team will guide you through the registration process, ensuring that your business is compliant with VAT regulations. We provide expert advice on VAT implementation, classification of goods and services, and preparation of accurate VAT returns
VAT Planning and Optimization:
We provide strategic VAT planning solutions to optimize your business's VAT position. Our experts analyze your transactions and business structure to identify opportunities for VAT savings and efficiencies. By developing customized VAT strategies, we help you minimize VAT liabilities and maximize cash flow within the legal framework.
VAT Advisory and Training:
Qromozone offers VAT advisory services to keep you informed about the latest VAT regulations and updates. Our experts provide guidance on complex VAT matters, answer your queries, and offer training sessions to ensure that your team has a clear understanding of VAT compliance and reporting obligations.
Choosing Qromozone for VAT Consultancy: Your Smart Business Move
Navigating the complexities of VAT regulations demands expertise and precision. Qromozone stands as your reliable partner for VAT consultancy, ensuring that your business remains compliant while optimizing tax strategies. Our seasoned professionals offer tailored solutions, meticulously analyzing your operations to devise efficient VAT plans. With Qromozone, you gain access to a team dedicated to staying updated on the latest VAT changes, providing you with accurate insights and guidance.
Trust us to simplify VAT complexities, letting you focus on your core business, confident in your VAT compliance and financial well-being. Choose Qromozone and take a confident step towards VAT success.
With our expertise and experience, we can help businesses navigate the dynamic landscape of VAT in the UAE, ensuring compliance and minimizing any potential risks or penalties. Our mission is to deliver holistic VAT services, encompassing all aspects of the business. As one of Dubai’s prominent VAT consultants, our approach is to provide comprehensive support to businesses throughout the setup of VAT practices and ongoing compliance.
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FAQ
VAT (Value Added Tax) is a consumption tax imposed on the supply of goods and services in the UAE. It affects businesses by requiring them to charge VAT on their taxable supplies, maintain proper records, and submit regular VAT returns to the tax authorities.
VAT consultancy services provide businesses with expert guidance and support in navigating the complexities of VAT regulations. They can help ensure compliance, optimize VAT processes, identify potential savings, and mitigate the risk of penalties or audits.
Qromozone offers comprehensive VAT consultancy services tailored to the needs of businesses in the UAE. Their experienced professionals can assist with VAT registration, VAT compliance and reporting, VAT planning and structuring, VAT audits, and resolving VAT-related queries or issues.
By partnering with Qromozone for VAT consultancy, businesses can benefit from specialized knowledge and expertise in VAT regulations. Qromozone can help streamline VAT processes, minimize errors, identify cost-saving opportunities, and ensure businesses remain up-to-date with any changes in VAT laws.
VAT consultancy is valuable for all businesses, regardless of their VAT registration status. Even if a business is not required to register for VAT, it may still need guidance on understanding the impact of VAT on its operations, managing VAT-exempt transactions, and assessing the applicability of voluntary registration.