Understanding VAT
What is VAT?
Understanding VAT through Online UAE VAT course provided by Reach Accountant.
It is a form of tax that is charged on the domestic consumption of goods and services except for that are zero rated such as food, medicines etc and on the goods and services that are classified as “Exempted” broadly on exports. The tax is levied at every stage from procurement of raw material, production and till distribution chain that is up to sales. The amount of VAT the user pays is on the cost of the product, less the tax that has already been paid during the production cycle. This form of taxation (VAT) ensures there is no double taxation of the same product or services.Understanding VAT through Online UAE VAT course provided by Reach Accountant absolutely free of cost.
Impact Of VAT in UAE:
VAT will come in effect to all business transactions from January 1st 2018.It will be a positive reaction for UAE as it will generate revenues for development of infrastructure and economic growth of the country. It is estimated that with the introduction of the new form of taxation “Value Added Tax” the economy may raise its annual revenues by Dh 12 billion in the first year of implementation of the VAT system. Gulf Cooperation Council (GCC) decided upon the implementation of VAT system as being one of the steps to diversify revenues due to the fall in oil prices. Tax reform was top priority in UAE succumb to the fall in oil prices and revenues. This fall in oil prices also affected real estate industry impacting the economic growth of the country.
Rate Of Taxation
Standard VAT rate of 5% will apply to goods and services unless specifically declared as zero rated or exempted.
Sectors specified below will be decided by each member state to be declared as either zero rated or exempt from VAT in their local laws;
- Education;
- Healthcare;
- Real Estate;
- Local Transport.
VAT treatment for following special sectors will be decided individually by each member state and in case not specified otherwise, standard rate will apply;
-Food products falling under the unified list (e.g. basic foods: bread, milk etc.) can be declared zero rated by the member states.
-Medical supplies (equipment and medicines) will attract zero rate at the discretion of each member state.
-Oil and gas sector including oil derivatives can be declared zero rated by individual member states under conditions laid thereon.
-Transport of goods and passengers (intra-GCC and internationally) will be subject to zero rate of VAT.
-Export of goods to jurisdictions outside GCC will be zero rated.
-Financial services’ VAT treatment is left at the discretion of each member state. Revenue from financial services (margin based income e.g. interest and premium etc.) will be declared exempt from VAT as a general rule, however this exemption may not apply to fee based services offered by the financial institutions as defined in the local laws of the member states.
-Free zones’ VAT treatment will be subject to respective laws of member states as they have right to choose their own VAT treatment.
How should businesses prepare for VAT implementation?.Understanding VAT through Online UAE VAT course provided by Reach Accountant
- Start maintaining your financial records in orderly manner;
- Businesses will now need to develop more efficient processes;
- Cost cutting on all fronts that you feel are unnecessary;
- Restructure your business to incorporate new talent who are able to multi task;
- Incorporate a robust accounting system that has VAT module;
- Get professional help for right ways to implement systems;
- Hire professional CA firms who could do the groundwork or leg work for your business for implementation;
- Assess capability of existing systems;
- Identify VAT implementation strategy;
- Identify contracts that need a VAT action;
- Identify inter-company transactions;
- Undertake training / awareness.
Mandatory Registration
A business must register if:
- The total value of their taxable supplies made within the UAE exceeds the mandatory registration threshold over the previous 12 month period, or
- They anticipate making taxable supplies with a value exceeding the mandatory registration threshold in the next 30 days.
- The mandatory registration threshold will be AED 375,000.
Voluntary Registration
A business may apply to register if they do not meet the mandatory registration criteria and:
- The total value of their taxable supplies or taxable expenditure in the previous 12 months exceeds the voluntary registration threshold, or
- They anticipate that the total value of their taxable supplies or taxable expenditure will exceed the voluntary registration threshold in the next 30 days.
- The voluntary registration threshold will be AED 187,500.
Details required for registration:
- Description of business activity
- Last 12 months turnover figure
- Projected future turnover figures
- Expected Import and export values
- Whether company is interested in dealing with GCC suppliers or customers.
- Details of custom authority registration.
- Trade License
- Emirates ID Authorized signatory can be a person who has the power of Attorney to sign on behalf of the business.
- Certificate of Incorporation
- Articles of Association
- Bank Details.
Upon Successful registration TRN Tax Registration Number will be issued within 20 days .
Importance of VAT returns:
It is mandatory to file returns as government has to generate revenues for country’s betterment. It also has a check on the black money as returns are filed every quarterly. The possibility of money laundering is handicapped by periodical checks.
No manual returns are accepted on the desk. It is mandatory that all the companies registering under VAT should go through online process of registration. This is basically adopted to avoid any kind of manual manipulations. Delay by any tax payee in filing tax return will be penalized by the tax authority.
Upon registration on the VAT portal, each taxpayer will be given a unique TRN and password for their online account on the website. These details are to be used to file returns online. Follow the steps below.
- Visit the online portal of the Federal Tax Authority at tax.gov.ae
2.Click the return filing option under the e-services section of the portal
3. Log in using your TRN and password
4. Fill in the VAT return form with the details of your business, transactions, tax liability, penalties (if any), etc.
5. Upload the required documents, bills, etc.
6. Verify the details filled by you and submit the form.
Reach Accountant Online Course -Understanding VAT
VAT implementation in UAE needs careful planning. It is a major change in the country for a better development of the economy. Thus all the entities should carefully plan their business strategies and policies with regards to the introduction of new taxation system
VAT. Reach Accountant online course provides you with full-fledged knowledge about VAT and its implication on the business. Reach Accountant offers e-learning course in both English and Arabic language.
Our VAT courses provide a comprehensive and extensive understanding of the VAT system, covering all the aspects in depth such as fundamental principles of VAT, regulation and administration, and guidance on the interpretation and consistent application of the GCC VAT legislation.
Our global network of expert professionals bring their knowledge and practical experience together for residents, corporate and companies of UAE to understand the working of VAT system. Through this e-learning you will be getting an insight into the commercial and practical realities These courses equip you and your workforce with the knowledge, skills and confidence to work with VAT.
Our diverse range of courses has been carefully designed to address business requirements at all levels; executive, managerial and operational. They are suitable for corporate and government sectors and can be customised for in-house training requirements. The highlight of the course is it comes free of cost. It is free online VAT course designed in the interest of the UAE residents. All you have to do is log in to the website www.reachaccountant.ae for further details. The study material contains 31 videos providing practical demo, the course will very shortly be going live. Keep visiting the site for updates on free online VAT course and avail its benefits.
Beneficiaries of the Course
| Type Of Industry |
| Manufacturers |
| Job work and Contractors |
| Consultant and Free Lancers |
| Café and Bakery |
| Jewellery Store |
| Transporters |
| Electronic and spare part dealers |
| Furniture Store |
| Packers and Movers |
| E-Commerce Back end |
| Service Centre |
| Textile Store |
| Importers and Exporters |
| Supermarket |
| Rentals and Subscription |
| Used Car Dealers |
| Diamond Traders |
| Takeaway Business |
| Wholesale and distributors |
| Workshop |
| Startup Business |
| Café and Bakery |
| Furniture Stores |
| Basic Course | Chapter # | |
| · Introduction
o What is Cloud Accounting? o What is Reach Accountant? |
||
| · Getting Started
o Creating a Organization o Creating a Branch o Creating a Financial Year o Downloading the Desktop Icon o Downloading the mobile App
|
1 | |
| · Customization
o Customizing the menu o Customizing the Tabs o Designing Invoice |
2 | |
| · Setting up
o Setting up Templates o Setting up email and sms |
3 | |
| · Importing
o Importing Customers o Importing Vendors o Importing Products o Importing Account Heads o Importing Sales Orders o Importing Quotes o Importing Invoices o Importing Receipts o Importing Purchase Orders o Importing Supplier Bills o Importing Payments o Importing Bank Transactions |
4 | |
| · Income
o Invoicing o Receipts o Sales Returns |
5 | |
| · Expenses
o Purchase Bills o Payments o Purchase Returns |
6 | |
| · Banking
o Bank deposit o Bank Withdrawal o Cheque returns o Bank Reconciliation |
7 | |
| · Salary
o Advance to staff o Salary Payments o PF/ ESI Payments o Boss / Director Salary |
8 | |
| · Cash Management
o Petty cash management o Expenses spent by Boss o Advance given for expenses |
9 | |
| · Asset Purchase
o Buying an Asset o Selling an Asset o Depreciation |
10 | |
| · Capital/ Loan
o Receiving a Loan o EMI payment o Partner Capital |
11 | |
| · Filing Tax Returns | 12 | |
| · Year end Closure | 13 | |
| · Point-of Sale Management
o Billing o Exchange o Gift cards o Loyalty points o Schemes o Pricelist o Discounts o Schemes o Daily Settlements o Lots o Touchscreen |
14 | |
| · Workshop Management
o Job card o Flooring Credits |
15 | |
| · Inventory Management
o ROL o Barcoding o Serial Number o Missing Stock o Loss or Damage o Conversion or Form o Units and conversion |
16 | |
| · Manufacturing Management
o Production Planning o Bill of Materials o QC o Batch Tracking o Effeciency tracking |
17 | |
| · Sales Management
o Enquiries o Appointment management o Quotations o Sales Orders o Sales Order Approvals |
18 | |
| · Purchase Management
o Purchase Indents o Purchase Orders o Purchase Approvals |
19 | |
| · Customer Management
o Credit limits o Invoice reminders o Birthday reminders o Receivables |
20 | |
| · Warehouse Management
o GRN o DC o Stock Transfer o Stock Journal |
21 | |
| · TDS Management
o Tax Deducted by us o Tax deducted from us o Reports |
22 | |
| · Import and Export Management
o Purchase in Foreign Currency o Sales in Foreign Currency o Forex Gain and Loss |
23 | |
| · Project Management
o Project o Stages/ Task o Bill of Quantities o Purchase Requisition o Project Invoicing o Profitability Tracking |
24 | |
| · Transport Management
o GC o THC o Approvals o THC wise profits |
25 | |
| · E-commerce Management
o API Integration o Auto importing orders, customers, products o Auto adjusting Inventory o Accounting and Taxes |
26 | |
| · Jewel store Management
o Order Management o Gold smith management o Chits o Old gold |
27 | |
| · Direct Sales Team management
o Database o Telemarketing o Appointments o Quotes o Orders |
28 | |
| · Consigment Management
o Consignment Sales o Consignment Purchases o Consignment Stock |
29 | |
| · Sub-contractor management
o Sending Raw Materials o Receiving Finished Goods o Accounting for payments |
30 | |
| · Branch Management
o Internal Vs. External Branch o Internal branch 1. Stock Transfers 2. Sales 3. Accounting o External Branch 1. Stock Transfer 2. Branch Control Account 3. Accounting |
31 | |
| · VAT Management
o DC without Invoice o Purchase under Reverse Charge o Export Sales o Bad Debts |
32 |
Takeaway from the E learning Course
The benefits of the training are enormous: more efficient handling of VAT by knowledgeable staff improves compliance and can positively impact on cash flow; the risks of fines and penalties are reduced; staff morale is boosted; and costs are reduced by more efficient procedures.
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