VAT E-File-How to e-file your VAT Returns using a VAT Software

VAT E-File-   How to e-file your VAT Returns using a  VAT Software       

What is VAT?

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.VAT E-File- How to e-file your VAT Returns using a VAT Software is discussed below

Impact Of VAT in UAE:

VAT has come  in effect to all business transactions from January 1^st 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. How to prepare VAT invoices in UAE should be a priority to UAE companies.

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.

Free Zones Exempt from VAT

The FTA on January 10, 2018 announced that 20 free zones in the UAE would be exempt from VAT. These are being referred to as ‘designated zones’. The areas included are largely fenced free zones with special controls on goods, rather than areas such as Dubai Media City or those dealing in financial services.

In addition, goods may be transferred between designated zones without being subject to tax if the goods are not used or altered during the transfer process, and the transfer is undertaken in accordance with the rules for customs suspension per Gulf Cooperation Council (GCC) Common Customs Law.

There is, however, an exception to this VAT exemption in the designated zones: fee charged for services would be VAT-taxed. So, for instance, a business incorporation service availed in a designated zoned would still be levied with VAT.

Here is the list of the designated zones:

Dubai

• Jebel Ali Free Zone (JAFZA)
• Dubai Airport Free Zone (DAFZA)
• Dubai Cars and Automotive Zone (DUCAMZ)
• Dubai Textile City
• Free Zone Area in Al Quoz
• Free Zone Area in Al Qusais
• Dubai Aviation City

Abu Dhabi

• Abu Dhabi Airport Free Zone
• Khalifa Industrial Zone (Kizad)
• Free Trade Zone of Khalifa Port

Sharjah

• Sharjah Airport International Free Zone (SAIF Zone)
• Hamriyah Free Zone

Ajman

• Ajman Free Zone

Umm Al Quwain

• Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port
• Umm Al Quwain Free Trade Zone on Sheikh Mohammed bin Zayed Road

Ras Al Khaimah

• RAK Free Trade Zone
• Rak airport free zone
• RAK Maritime City Free Zone

Fujairah

• Fujairah Free Zone
• Fujairah Oil Industry Zone (FOIZ)

How should businesses prepare for VAT implementation – VAT E-File-   How to e-file your VAT Returns using a  VAT Software       

With the introduction the UAE, there are considerations that businesses would have to take care of with regard to tax consulting of VAT and amending business policies.

• 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.
• Using appropriate software meeting all the business requirements post implementation of VAT

Importance of VAT returns: VAT E-File-   How to e-file your VAT Returns using a VAT Software       

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.

With the inception VAT form of taxation returns should be filed every quarter that is at a period of every three months. In some cases monthly. The registered entities can file the returns using online services of the Federal Tax portal. Timely submission of the e-returns keeps the company away from being black listed and also helps for expansion of business. A registered company should file returns even if the tax paid by them is NIL.As the returns should be filed every three months record keeping should be prompt and accurate. The e-services section of the Federal tax portal provides online assistance for filing VAT returns. The website available for registration www.tax.gov.ae

VAT Return Due Dates

The last date to file VAT returns will be the 28th of the subsequent month following the end of the tax period. For quarterly VAT returns, due date will be 28th of the subsequent month following the end of the quarter. The last date to file VAT return for the year 2018 is given below:

For the monthly return, the last date to file VAT return will be 28th of the subsequent month. For example, for the return period of January 2018, the last date will be 28th February, 2018.If the due date falls on a weekend or national holiday, the deadline shall be extended to the first following working day . Late submission or payment can result in a penalty levied by FTA.

VAT Return Due Dates Post Implementation Of VAT.

FTA has provided relaxation with respect to the VAT return period. The FTA has provided the first VAT return period from January 1 to May 31 and subsequently on a quarterly basis. This means the first return will need to be filed on or before June 28 and later returns from June 1 to August 31, September 1 to November 30, December 1 to February 28-29.

All businesses must log onto the FTA’s website and check the tax period under their profile. Some businesses have been given one month and others have been given five months. FTA has relaxed the timeline for filing the first VAT return which would enable many businesses to gear up for the time loss. Businesses can strive to be fully compliant in terms of reporting VAT obligations to authorities.

Earlier, the first tax return filing for companies with more than Dh150 million turnover was one month. For others, it was quarterly. Now, firms can file their first tax returns after four or five months in June as per the new timelines appearing on the FTA’s dashboard after log-in by a member company. Such an extension in filing returns shall help firms to better comply.Most of the micro, small and medium enterprises have been granted five months, four months and so on as their filing period for the first return.
This will enable various entities to cope up with VAT implementation requirements and ensure they do not fall on the wrong side of the legal provisions.
Businesses need to acknowledge that VAT is a business change and not just an accounting change and accordingly utilise this time bonus to streamline all business functions as per the provisions of VAT to ensure business runs in line with policies.

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.

1. 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.

VAT E-File-  How to e-file your VAT Returns using a VAT Software      

Reach Online VAT Accounting Software-E-file your VAT Returns

UAE registered companies are expected to file their first quarterly VAT return for Jan-Mar’18 by 28th April, 2018. The VAT returns in UAE are to be filed online.The registered businesses are required to generate VAT returns in an acceptable format as prescribed by FTA and upload the return file in the portal. Therefore it is important for businesses to have a right software which helps in accounting VAT and has a capability to generate the return file in XML or Excel format

The VAT return filing process in UAE is very simple and easy. The businesses with the right tax accounting software will be able to file the returns effortlessly and save time.

The registered businesses in UAE are required to generate the VAT return File from their accounting software, login to the FTA’s e-tax portal and upload the return file. On the basis of the uploaded return file, the e-tax portal will validate the file and accordingly the details from the file will be auto-populated in the online return form. The steps to file the VAT return are given below:

Generate the VAT return file from the Reach online VAT accounting software.

It is very important for businesses to note that the VAT return file, generated only from the certified tax accounting software, will be allowed to be uploaded in the FTA’s e-tax portal. Here, certified tax accounting software refers to that software which meets the guidelines set by the FTA.

Thus, it is crucial for businesses to evaluate the right software as certified by the FTA, so that they are allowed to generate the VAT return file easily.

1. Login to FTA e-tax portal using your login credentials and upload the return file.

After generating the VAT return file, you need to login to the FTA’s e-tax portal using the credentials. Using the e-tax portal upload option, you need to browse and select your return file.

1. Validation and Auto Fill VAT Return Details.

Once the file is uploaded, you need to click ‘Auto Fill VAT Return’ which will auto-populate the details from the VAT return file to the VAT return form in the FTA’s e-tax portal. Once this button is clicked, the FTA portal will validate or authenticate whether the uploaded file has been created by a certified tax accounting software. If the file is authenticated, only then the details will be auto-populated into the VAT return form. If the file is not authenticated, it will be rejected and an appropriate error message will be displayed.

1. Submit VAT Return

Once the VAT return file is authenticated, you are required to fill the other details required by FTA and submit the VAT return .

Penalties

Administrative Penalties –

Administrative penalties are intended to address non-compliance, and encourage compliance.  The FTA has the power to waive or reduce penalties at its discretion (e.g. taxable person has a reasonable excuse for the error). Few examples of administrative violation:

• If the person conducting a business fails to keep the required records and other information;
• If the person conducting a business fails to submit the data, records and documents related to tax in Arabic language when requested by FTA;
• If the taxable person fails to submit a registration application within the period require

Tax Evasion Penalties –

The FTA can issue penalties for tax evasion. Tax evasion is where a person uses illegal means to either lower the tax or not pay the tax due, or to obtain a refund to which he is not entitled under law.  The imposition of a penalty under tax law does not prevent other penalties being issued under other laws. •

Few examples of instances of tax evasion:

• Where a person deliberately provides false information and data and incorrect documents to the FTA;
• Where a person deliberately conceals or destroys documents or other material that he is required to maintain and provide to the FTA.

Reach Online VAT  Accounting Software for businesses to e-file VAT Return easily

In the VAT regime from 2018 onwards, software will play a key role and it will define the success of your business in the field of compliance adherence. For businesses, having the right tax accounting software is a must. The software will help the businesses in accounting VAT with ease and generate accurate VAT return files in XML or Excel format.

Appropriate tax accounting software is one which helps in accounting the VAT records with in-built capabilities to prevent, deduct and allow seamless corrections of errors or discrepancies so that all the records and the returns are authentic Thus, the businesses need to carefully evaluate the software which will help you in hassle free transition of your businesses to new VAT regime, ease of accounting VAT and filing returns.

Need to upgrade to Reach VAT Software :

Reach Accountant software is well designed to match all the needs for successful running of the business. The software can be used in different industries ,traders ,manufacturers, retailers,  workshop ,business projects etc. It is an accounting software that can automatically manage your book of accounts, taxes, inventory, sales, purchases and more online quickly and securely

Top Features of the VAT Software are:

Features of the Reach Online VAT Accounting  Software In detail are:

• Accounting Management: All functions relating to accounts are inbuilt with the software. You can manage your Accounting Ledgers, Bank & Cash Operations, Purchase & Sales Estimates, Warehouse Allocations, Expense Recording, Expense Grouping, Payments – Part or Full, Journal Entries, Income and loss a/c, Balance sheets, Receipts – Part or Full, Contra Entries, Financial Reports, Day book.

• Tax Management: Our accounting Software automatically calculates the taxes relevant for every bill created. The Software is designed as per the government norms for calculation of VAT. It also has the option to add any number of taxes relevant to the business. In case of change in tax percentages a change it in the software on your own. All you have to do is add your tax percentage and our software will calculate the taxes automatically. This multiple tax scheme can also be applied to multiple products on a single purchase.

• Income Management: The Company can create Quotations then the same can be converted as a Sales order or Pro-forma invoice or Invoice. From Invoice you can create Receipts as well. Accountants will be able to know what payments have been received and what are pending in the reports. You can also set reminders for receiving payments.

• Expense Management: You can create Purchase Orders then the same can be converted as bill or payments. You can also create Debit notes for purchase returns. Accountants will be able to know which purchase bills have been paid and which are pending in the reports. You can also set reminders for making payments.
• Invoicing: Generates VAT compliant invoice of the company in the specified design as requested by the client or can choose from the available templates in the software. It also converts quotes to invoice .One of the features is the software can convert the Foreign currency invoices to base currency and further calculating the VAT at UAE standard rate.

·         Print Tax Invoice In Arabic: Reach software lets you print invoices in Arabic, English or both, as per the mandated guidelines of GAZT and FTA.

• Auditor View: Full-fledged Financial reports, Tax reports VAT reports, read process by auditor, with e-filing options, PF & ESI Reports, Tax Consulting Modules are some to be named.
• Check Post for VAT returns: As the software has been designed exclusively to aid individuals and entities to be VAT compliant in UAE, the set of rules and regulation laid by FTA (Federal Tax Authority) of UAE are embedded in the software. Hence any process error will be popped up by the application can be viewed .For instance wrong Tax Registration Number, incorrect taxable figure, wrong taxation period.
• Automatic Update on Tax legal Sections: As the Reach software are cloud computed software gets upgraded to update any revised tax laws and section if any in future.
• Computation Of VAT Returns: The software is inbuilt with all the detailed crucial information  on tax computation Tax Assesee can  fetch all the details of all the taxable transactions It lists down transactions which are included and excluded in the VAT return  calculate input tax, reverse charge and output tax to avail claim if any

• Filing Of VAT Returns: The registered businesses in UAE are required to generate the VAT return File from their accounting software, login to the FTA’s e-tax portal and upload the return file. On the basis of the uploaded return file, the e-tax portal will validate the file and accordingly the details from the file will be auto-populated in the online return form. Reach VAT software is designed to ease the process of filing returns and comes under the purview of FTA prescribed set of rules and regulations.

• VAT Reports etc.
• Calculate VAT automatically.
• VAT support in Sales, Purchase, Sales and Purchase returns, Journal entries.
• Generate Federal Tax Authority compatible tax reports.
• VAT Paid (charged by suppliers) and Vat Collection (Charged to customers) Analysis.
• Transaction wise details of VAT paid and VAT collected.
• Attach every Vendors/Customers VAT number and other details.
• VAT supported for Goods (stocked) and Service (non-stocked) items.
• Online application accounting.
• VAT Account Reconciliation, VAT Collection & VAT Paid analysis report.
• Report export to excel and other standard formats.
• VAT returns statement compatible with Federal Tax Authority standards.

Online accounting VAT software enables you to file vat returns, manage accounts and other business operations from any geographical area be it at the comfort of the house.

• Receipt: Receipts can either be manually entered or imported it in excel format easily.
• Payments: Payments can either be manually entered or imported it in excel format easily.
• Multi Company: Manage business through comfort of the smart phone.
• Tally Import: Tally files can be easily imported to Reach Software of various periods and manage business easily.
• Auditor’s Report: Full Financial Report are available,Read process by Auditor,Tax Reports,VAT Report with e-filing options,PF & ESI Reports,Tax Consulting Modules are some features mentioned.
• Mobile Application: Access business information through tabs and android smart phones, pick photos of expense vouchers and attach to expenses, daily profitability and other key reports can be viewed on phone.
• Bank Synchronization: Bank Statements can be imported in to Reach software through excel files.
• Security: There is complete security of data stored in the hard disk. Data can be accessed and control by creating access restriction. One time password facilities also ensures a check in the log in to the website.

• Run Business from anywhere: The business can be run access data from anywhere at your comfort. Just like checking mails from the laptop or systems.

• Free and Automatic Upgrades: At Reach Accountant you will be provided free services of upgrading the software frequently with new features and use it absolutely free.

• No investment in expensive hardware: The software is browser based. It just requires internet connection which can be connected to multi computers without using LAN and servers.

• API: The client can integrate the existing software with Reach accounting application ,

• Automatic Data Backup: Reach stores all the data in servers offsite with regular backups. Hence business information is safe and secure

·         User Interface & Complexity:The software is designed to make its use friendly and easy,no cumbersome process to operate the application and software.

• Scalability:It is an VAT accounting software which can scale with your business needs. . Some software companies offer only one version of the product and some have progressive versions depending the business type or size. Reach Accounting software offers both integrated an entry level version as well as a feature rich version which you might not need for the current business processing but will definitely need in future for business development.

Top Two Features of the Reach Online VAT Accounting Software

• Outsourced Accounting: The software enables to finish the outsourced accounts in less than 30 minutes.

• Real Time Accounting: Allows client to record sales and purchases online, while finalizing accounts that is checking the Audit trail, providing MIS reports, checking Tax reports, printing financial reports and filing taxes.

Technology Used

Reach has implemented the latest technology Cloud Computing to handle  day to day business transactions just  a click away from your browser from any part of the world.

Cloud Computing is a concept through which organizations can manage their data centres, processes and applications online via internet on the scheme of pay for use basis.

Advantages of Cloud Accounting Software:

– Nothing to install. Just signup and start entering your transactions
– You don’t have to worry about upgrades as all changes are pushed automatically. Online softwares are always up to date.
– Can be accessed from any internet enabled device at any point of time
– Cloud accounting software providers take care of backup and maintenance which is a cost saving for you.
– Data across all your offices is always synchronised.
– It can integrate with other cloud based applications.

Reach have established themselves as long-term experts in user-friendly business accounting. Their accounting software makes it easy to manage income and expenses, unlimited bank transactions, and even generate reports for better decision making. With pricing plans for every business type, from a small start-up to a rapidly growing international business, you’ll definitely be able to find the