tax consultant in Dubai

Automated VAT Filing in Dubai

In January 2018 the UAE implemented the Value Added Tax (VAT) on the consumption of most goods and services in Dubai.  Here’s what you need to know about automating your VAT filing in Dubai.

Does My Business Need to Pay VAT?

Part of an overarching attempt to reduce reliance on oil-generated income, VAT is a transaction-based tax applied to most goods and services.  Levied at multiple steps in the supply chain, VAT is ultimately paid by the consumer but is collected by businesses.  (Guidance on zero-rated and exempt supplies can be found here.)

Why Automate VAT Filing?

Calculating and reporting VAT can be complicated.  Businesses must first register for VAT, then track and collect VAT on goods and services they supply, while paying it on goods and services they consume.  At the conclusion of each tax period, businesses are required to report and pay their tax liability–the amount of VAT they owe to the government minus any credits for VAT paid by the company.

Keeping track of VAT collected and paid is complex enough, and a long list of exempt goods and services makes it even more tedious to track.  Additionally, the fact that VAT is tallied along the supply chain but ultimately paid by the consumer can leave businesses with serious cash flow concerns.  There is also the risk of steep fines and penalties if VAT is not reported accurately.  All of these aspects of VAT can create a huge logistical burden for companies, making automated VAT reporting an appealing option.

How to Automate Your VAT Filing in Dubai?

Business management software can significantly simplify VAT accounting, invoicing, and record keeping.  Because of the complexities of VAT (there are 11 separate details that need to be included on VAT-compliant invoices throughout the supply process), an end-to-end platform is the best way to reduce wasted time spent tracking VAT manually while reducing the risk of errors in the process.

Having a VAT Impact Assessment from an experienced and reputable provider like Chartered House is a great way to get started.  From there, it becomes possible to create a customized automation system that complies with VAT requirements without distracting you from what’s most important: running your business.