What is VAT- What are the due dates to file VAT returns in UAE

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.

Significance Of VAT in UAE:

VAT will be incorporated in all business transactions from January 1^st 2018.It will be a milestone 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:

Taxation rate in UAE will be 5% on all goods and services. Government has decided upon the marginal rate of 5% in the interest of the residents, as purchasing power of the consumer will not be hampered to an extent. Thus implementation of VAT will not have adverse effect on the people who are on the lower end of the spectrum.

However GCC has agreed on three VAT rates that will levied by the member states at the time computation of tax:

• Standard Rate
• Zero Rate
• Tax Exempt

Who needs to register for VAT?

A business should register for VAT if their taxable supplies and imports exceed the mandatory registration threshold of 375,000 AED.

A business can also choose to register for VAT voluntarily under two conditions:

• If the supplies and imports of the business are less than the mandatory registration threshold, but greater than the voluntary registration threshold of AED 187,500.
• If expenses of the business exceed the voluntary registration threshold. This opportunity is designed to enable start-up businesses with no turnover to register for VAT.

What are the due dates to file VAT returns in UAE

UAE VAT Return

VAT Return, also known as ‘Tax return’ is a periodical statement which a registered person needs to submit to the authority. The details and data to be furnished in the VAT return for the purpose of tax are specified in the UAE VAT executive regulations. All the details as required in VAT Return, needs to be prepared in accordance with the VAT Return format issued by the authority.

VAT Return Filing Period

The standard VAT return filing period will be on a quarterly basis. However, the authority may request certain type of businesses to file the VAT return on monthly basis to reduce the risk of tax evasion and improve the monitoring of compliance adherence by the business.

Also, in order to ensure the reduction of compliance burden on the businesses and administrative burden on the authority, the law is provisioned to allow a certain type of businesses with a longer VAT return filing period.

What are the due dates to file VAT returns in UAE

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 filVe AT 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.

VAT Return Due Dates post VAT Implementation

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

VAT Return Form

The registered businesses in UAE are required to file online VAT return. The VAT return form in UAE is expected to be at summary level. This means, the registered businesses are required to submit the consolidated details of supplies such as total sales, total purchases, output VAT, input VAT and tax payable.

As per the Federal Law No. (7) of 2017 on Tax Procedures, a taxable person needs to submit a VAT return in UAE with the information and data specified for Tax purpose in accordance with the form, specified by the Federal Tax Authority (FTA). Every taxable person is required to submit the VAT Return for each Tax period within the time prescribed by the FTA and this must be in accordance with the provisions of the UAE VAT law. The taxable person is also liable to remit the tax due to the FTA within the time frame specified by the UAE VAT Law.

The UAE VAT Executive Regulations has prescribed the mandatory information which needs to be declared by the registered person in his VAT Return. The following are the details which need to be contained in the VAT Return:

1. The name, address and the TRN of the Registrant: The Tax Registration Number (TRN) provided by the FTA needs to be furnished in all the VAT Returns. Based on the TRN number, the name and address details are expected to be auto-populated.
2. The date of submission: The VAT returns need to be submitted within 28 days following the end of the VAT return period. Here, the date on which returns are submitted will be captured.
3. Tax Period: Tax Period is the return period to which the Tax Return relates. For example, for January to March’18, it will be Jan-Mar’18.
4. Details of the Supplies (sales) made in the VAT return period: You need to furnish the value of supplies (sales) and output VAT collected during the return period. Also, the supplies need to be categorized into the following:
5. Standard Rated Supplies: This includes all the domestic supplies on which 5% VAT is applicable. Further, these details need to be furnished at the emirates level as shown below:
   1. Standard rated supplies in Abu Dhabi
   2. Standard rated supplies in Dubai
   3. Standard rated supplies in Sharjah
   4. Standard rated supplies in Ajman
   5. Standard rated supplies in Umm Al Quwain
   6. Standard rated supplies in Ras Al Khaimah
   7. Standard rated supplies in Fujairah
6. Zero rate Supplies: The details of notified supplies which are under Zero-rated list needs to be furnished in this section.
7. Exempt Supplies: Supplies such as financial services, residential building etc. which are notified as exempt supplies need to be captured here.
8. Reverse Charge Supplies: Supplies such as imports and other notified supplies on which the recipient or buyer is liable to pay VAT on reverse charge mechanism.
9. Intra GCC Supplies: Supplies made to customers registered for VAT in other GCC implementing states and for which the place of supply is the other GCC implementing state needs to be captured here.
10. Details of the expenses (Purchases) made in the VAT return period: You need to declare the value of expenses incurred on which you are eligible to recover Input Tax and the amount of Recoverable Input Tax in the VAT return period. Please note, the value of input tax credit which is restricted or which you are not eligible to claim, should be reduced from the total and only the net value needs to be mentioned. Also, the total expenses and recoverable Input Tax needs to be shown separately for standard rated expenses (on which 5% VAT was paid) and the expenses, subject to reverse charge.
11. The total value of Due Tax and Recoverable Tax: You need to mention the total output tax collected and recoverable input tax during the return period.
12. Payable Tax: This will be arrived at, after adjusting the Output Tax with Recoverable Input Tax. If output VAT is higher than input VAT, it will result in VAT Payable. Otherwise, it will be VAT refundable which can be carried forward to next return period or can be claimed as a refund.

The above are the some of the mandatory details which need to be furnished in the VAT return form. Apart from the above mandatory details which is applicable for most of the businesses in UAE, the return format consist other additional details listed below.

  Profit Margin Scheme

  Goods transferred to GCC implementing states

  VAT paid on personal imports via Agents

  Transportation of own goods to other GCC states

  Recoverable VAT paid in other GCC implementing states

  Tax Refunds for Tourists Scheme provided

VAT Return Filing

The VAT return filing in UAE is expected to be entirely online. This means, all the registered businesses in UAE are required to create or generate the electronic VAT return statement as prescribed by FTA. The e-VAT return form will be in Excel or XML format.

Once the returns are prepared, the taxpayer needs to login to FTA portal, upload the VAT return file and submit the returns. The VAT Return format and facility to file the returns will be available very soon in FTA portal.

Most of the registered businesses in UAE are expected to file their first quarterly VAT return for Jan-Mar’18 by 28th April, 2018. The VAT returns in UAE are online returns. 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. As a result, it is crucial 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.

Secondly, one of the FTA’s requirement is that the tax accounting software should generate the VAT return file as per the prescribed format which businesses can upload in FTA’s e-tax portal. Only those return files which are generated from a certified tax accounting software will be allowed to be uploaded into FTA portal.

VAT Return Filing Process

The VAT return filing process in UAE is expected to be 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:

1. Generate the VAT return file from the 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 .

Key Points for businesses to 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

Here, right 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 foolproof. Very importantly, it should be certified by the FTA, allow you to generate accurate VAT return file and various other reports/file as required by the FTA.

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 Online VAT Accounting 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 online VAT accounting software that can automatically manage your book of accounts, taxes, inventory, sales, purchases and more online quickly and securely.

Benefits Of Reach Online VAT Accounting Software

Reach Online accounting software systems are rapidly evolving, giving business owners the ability to choose how and where they manage their finances. Whether at home or on-the-go, business owners are now able to execute administrative functions such as instantly viewing bank balances, tracking expenses, sending invoices ,supervising the work flow of branches through Reach online VAT Accounting Software thus making business more viable.There are many advantages of using an online accounting system including:

Reach online VAT accounting system can help you manage your business by improving your recordkeeping processes and give you the tools you need to analyze business results and make sound financial decisions.

• Online Access 24/7
• Cost
• User Friendly
• Technical Support
• Efficiency
• Analysis –
• Security and Accuracy
• Inter Connectivity of Branches:
• Opportunities
• Scalability

Top Features of the Reach Online VAT Accounting Software 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 featuress 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 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 accounting software that is easily accessed online and an attractive option for large or small business owners. Companies that use cloud accounting require less initial server infrastructure to store data and don’t require IT staff to maintain or update the cloud accounting system. Get the spectacular benefits of cloud accounting as you seamlessly integrate with the powerhouse

Benefits of cloud accounting:

• Streamline billing and ordering processes
• Capture and store financial data to most accurately model and report on your finances
• Use Chatter to enable more effective collaboration across your organization
• Greater return on investment and real-time, multi-dimensional financial analysis