Businesses in UAE have the most important obligation to follow which is to pay their due taxes and comply with the rules of FTA. If the taxpayer follows all rules and regulations of VAT, then it will be easier for him to manage things with the tax authority. However, if taxes business fails to pay taxes on its due time chances of financial damage increase. Businesses will charge heavy penalties by FTA in case of failure in compliance. Having good VAT compliance is essential for all businesses in UAE.
The main objective is to keep a close check of all your taxes and pay them correctly at due time. But there are always some mistakes in submitting your taxes which can be due to several factors: work deadlines, staff shortage or excessive work pressure that all the VAT related tasks businesses ignore. However, some important points are essential to follow to reduce tax mistakes and errors and improve your VAT compliance.
Firstly, the most important step is to maintain all your VAT records correctly. Records of all the additional documents are also required to have proper records in case they are needed. The Federal Tax Authority has published VAT compliance rules and regulation guides for taxpayers. FTA’s published guides can be very helpful for taxpayers to understand the process of submitting their taxes. Also, the taxpayer must keep himself updated with the new tax laws amendments. This will ensure good compliance and remove errors.
The second step is that taxpayers should define a process under which extracting and collating VAT return information is obtained systematically. Another important aspect is that different business sizes or categories have a different processes of VAT compliance. However, the ground rules remain the same for all the businesses regardless of their size or category. Basics are to keep all the records and information of their VAT returns accurate and submit them at due time.
The most crucial step in the VAT compliance process is people involved in handling VAT compliance tasks. Businesses should be extremely careful when they are giving this responsibility to any firm or an individual. They must have a complete understanding of your business activities and guide you through the process. The maintenance team must keep all records updated. Otherwise, your business will have to face the consequences of poorly maintained records and not submitting them accurately and on time. Problems occur when the compliance tasks are in the wrong hands or without sufficient training or experience. Businesses should take this role very seriously and hire people who will make this job easier for their business.
Businesses should give VAT compliance a high priority. Taxpayers must ensure all the activities are done properly and are meeting the regulations. They should work with the right people to manage the potential risks or mishaps in their system correctly. Ultimately, their good compliance will keep their business operations streamlined and efficient.
