Five Things You Need to Know About VAT Accounting
VAT got introduced in UAE in 2018. Its more than a year but people are still lacking the important knowledge of VAT. If you want to know about VAT, here are some of the most important things that you need to know;
The understanding VAT has become the need of the time. No matter whether you know about it or not, you need to know about it. If not, you might get into many troubles. Not just that the VAT registered people should know about VAT but also the taxpayers. They should know about the ifs and buts of VAT because this is what will save them in the long run.
Registration and deregistration of VAT
First of all, you must know what is the right time for your business to get registered for VAT. The threshold for VAT registration in UAE is AED 375000 per annum. If your annual turnover increases from the threshold, it will become mandatory for you to get registered for VAT. If the turnover decreases from the threshold, the company can get deregistered from VAT id it wants.
When a business gets registered for VAT it becomes important for it to be held accountable for tax. He is supposed to keep all the records of the data and the daily transactions. The accountants are good at keeping all such schemes of VAT aligned. There are different Schemes of VAT as well which may help the company in savings its time. The company can also opt for them.
Keep the records of the data
As we have discussed earlier that the companies need to keep all the records of their data. This is because they can be held accountable any time. If they do not possess the required data in such a case, they will have to bear with punishments and penalties. Note that a company is required to maintain the data of at least the past 5 years for the audit.
Keep in mind your duties
Make sure that you know what your duties are as per VAT. If you do not complete any of your responsibility, you will have to give several penalties and fines. So, it is better to fulfil all the requirements on your end so that you may not end up paying fines. There are different penalties which range from the severity of the matter. If the company forest gets itself registered for VAT even after crossing the threshold, it will be fined. If the company doesn’t submit the VAT return on time, it will be fined or penalized. If the required data is not presented, it will be fined.
So, it is better to be true to your business and does not play with its image. After all the reputation of the company plays a huge role in bringing more business to the company.
Although the tax agents can also be of your help regarding VAT in UAE you should still start getting some understanding about VAT. This will help you to a huge extent and you will not even need anyone. VAT and its knowledge are necessary. So, you should work on it.