Tag: VAT

Categories
Blog

Common Errors Firms Face While Filing VAT Returns

Calx Blog Covers
Calx Blog Covers

With the introduction of Value Added Tax (VAT) in the UAE, businesses face various changes while handling financial matters. If you’re unable to understand its process and make common errors then different problems can occur. These problems can result in hefty penalties, compliance issues, and a host of financial woes. 

Common Errors To Avoid While Filling VAT Return in the UAE

  • Incorrect Reporting

Make sure that you correctly report your sales and purchases to avoid any discrepancies in VAT calculations. The error of incorrect reporting can occur due to mistakes in data entry or misclassification of transactions. To avoid this issue, regularly reconcile financial records with VAT returns to spot any mistakes. 

  • Late Filing and Payment

If you do not pay attention to the deadlines of VAT return, then your business will be liable to pay penalties and interest change. Communicate with your team members to stay alert about the deadlines to ensure timely submissions. Moreover, you can also set reminders and make sure that you have enough funds readily available for payments. 

  • Neglecting VAT Updates

VAT regulations can evolve at any day which makes a compulsion to stay updated with the ongoing changes. If your firm tries to file a VAT return on the basis of the previous regulations, then problems can arise. To overcome this situation of non-compliance, regularly monitor tax updates and adopt VAT procedures accordingly. 

  • Inadequate Record-Keeping

Your business can face challenges with poor record-keeping practices which hinders VAT compliance. Furthermore, the absence of proper documentation can also cause disputes among tax authorities. Therefore, you should maintain all records of your business consisting of invoices, receipts, and all other relevant documents. 

Final Thoughts

To navigate the VAT landscape successfully, you need to stay updated with all the new details and do timely submissions. Avoid some common errors and maintain all of your financial records. Moreover, you can minimize the risk of non-compliance by addressing these common mistakes. 

Categories
Blog

Excise Tax and VAT: Major Differences

Calx Blog Covers
Calx Blog Covers

The introduction of excise tax and VAT in UAE was almost made at the same time between 2017-2018. Although both of these taxes are forms of indirect tax they do have some major differences. Note that these taxes are a source of additional revenues for the UAE government. 

4 Differences Between Excise Tax and VAT

  1. Purpose of Taxation 

In the case of excise tax, the purpose mainly focuses on reducing the consumption of unhealthy goods. Furthermore, it increases the government revenue as well which they can use for public welfare. 

The value-added tax focuses on providing the government with a new source of income. The government can further use this income to provide the public with high-quality services. 

2. Applicable Goods and Services 

Excise tax normally applies to certain products and services which include carbonated, energy drinks, and tobacco. Moreover, it also applies to any drink that provides mental or physical stimulation such as caffeine, ginseng, etc. 

VAT charges are applicable on most of the products and services in UAE. Financial services, residential buildings, and bare land are some of the services which are not liable to value-added tax. 

3. Imposition of Various Rates

The rates of excise rate can vary depending upon the product or the service you’re purchasing. For example, the rate is 50% for carbonated drinks and 100% for energy drinks and tobacco. 

There is a fixed standard rate for VAT in the UAE which is 5%. In a different scenario, zero-rated supplies (0% VAT) are liable to certain products which can be the export of goods, international transportation services, etc. 

4. Liable Business Registration

All those businesses dealing with the import or manufacturing of goods levied excise tax are applicable to register for excise tax. Any business that owns taxable goods but is unable to prove it will also register for excise tax. 

All tax-registered businesses in UAE whether it’s from Mainland or Freezone are liable for the standard VAT charges. If the UAE Cabinet declares any freezone area as a designated zone, then that freezone area shall be tax-free.

Conclusion 

Excise tax and VAT are two different tax systems in the UAE that bring additional responsibilities to businesses. Sometimes people find it difficult to adjust to these different tax systems. Therefore, it is advisable to understand its differences to assist you in dealing with it. 

Categories
Blog

Using EmaraTax To Claim VAT Refunds

E628B6F8 9028 46BE A462 EDB7DE0DE42F
E628B6F8 9028 46BE A462 EDB7DE0DE42F

Most small businesses in UAE generally doesn’t have any clue on recovering from a tax difference amount. When the VAT charges on the purchased goods becomes more that that of the VAT amount you get through the sales, then a problem arises. Before you start worrying on how to handle such complex situations, discover a way to log into EmaraTax platform. 

Steps for Claiming VAT Return Using EmaraTax 

Step 1: Login to your account 

Firstly, you need to enter your credentials for logging into the EmaraTax platform. Furthermore, you can also use the UAE Pass as well. Now proceed into your account and select the user type. As you’re eligible for tax under the provision of UAE VAT lax, select the Taxable person option. 

Step 2: Choosing the VAT module 

You will come across the Taxable Person homepage which will be displaying your profile. You can then click on the view option to open it. Afterwards, go on the left-side bar and click on the VAT module option. 

Step 3: Creating refund requests 

You will see two different options in front of the screen. Go and select the VAT 311 and click on “create new” for a new refund request. A new window will open letting you know about the guidelines, templates, criteria. After you have completely read and understood it, mark the check box to proceed further. 

Step 4: Verifying information 

Now you have to enter your personal information including your bank details as well. Make sure they are accurate for ensuring a smooth working process. Moreover, double-check the entire information for avoiding any grammatical errors which may lead to payment failure. 

Step 5: Refund your VAT amount 

Choose the VAT return and enter the refund amount while clicking on “Add Supporting Details” for getting a breakdown. Upload a filled template by adding additional refund details. Remember to upload your required documents and download the filed amounts for selected tax period. Finally, submit the refund request and note down the application reference number for future purposes. 

Conclusion 

The EmaraTax platform lets many businesses in UAE to file returns and apply for refunds in a convenient way. The tax difference can affect the business operations. Therefore, stop confusing yourself and make use of this great platform for claiming direct VAT returns.