What is VAT?
VAT stands for Value Added Tax. This is a certain percentage imposed on most goods, subject to exceptions and limitations, during each stage of its production and distribution. Even though VAT in Dubai has not been exhaustive, with recent times, there have been more regulations imposed on businesses in a manner which isn’t too burdensome yet, in need of close compliance.
If you find this to be quite a difficult task or are not too keen on handling these finances by yourself, it’s time to take charge. Hire someone who has the expertise to do it for you!
A tax advisor is someone that will help you to keep your financial records in order and to register you for payment, accordingly. If your company is small, and simply requires no such tax payments, your tax consultancy will still need to maintain records of your financial transactions, so that when you do reach a point where you have to make tax payments, these records will help assess the amount payable. These records need to be stored for up to at least 5 years, to ensure that any further issues with regard to the payments will not surface.
What happens if you miss out on paying these taxes on time?
Why would you want to give a chunk of your profits along with the tax itself to the Federal Tax Authority? If you miss out on any prompt payments, you are likely to be subject to a fine and the longer you go on, without paying what you owe; you are only likely to pile up a bigger percentage on your fine.
You will also be liable to pay a fine if you have not registered for VAT payments, and have exceeded the value (worth) that doesn’t require VAT registration.
Some ventures are simply protected with an exception!
If you however, are looking to start up a venture and want to see as to which types of companies and businesses have VAT exceptions or reduced forms of tax payable, the following would be good list of suggestions for you to start from.
- Educational services
- Islamic finance products follow Sharia’h law
- Investments with regard to precious metals
- Healthcare sector
If you feel like taxes are a heavy burden on your daily income, you always have the right to incorporate VAT into your bills and you simply have to include them in your taxation records, thus you are given a good chance to claim back the VAT you are paying to the state. Keeping up with your tax dues have been made so much easier with the role of tax consultants growing in the finance industry. So why not employ one?