Understanding the Whole TAX Registration Process

Understanding the Whole TAX Registration Process

The UAE has been tax-free for long, and the imposition of VAT on goods and services is the recent inclusion in the whole spectrum. This tax is popularly known as Value Added Tax (VAT). The tax registration number (TRN) is the registration number allotted to a person who is registered for VAT in the country by the Federal Tax Authority. This tax was imposed in 2018; it is a 15 digit identification number from which the federal tax authority differentiates a person from the rest of the folks. A person must mention this number in various government documents such as tax invoices, VAT returns, tax credits, etc.

Tax registration in UAE allows the government to keep track of all transactions made by businesses or individuals. Only the entities (both Natural and Legal) having a TRN is liable to charge VAT from the customers.

Criteria for TRN Registration

A business owner has to pay the government the amount of taxes that he receives from its customers. A refund is also received from the government on the tax that has been paid to the suppliers. The registration of VAT is optional for all those businesses whose supplies and imports are more than AED 187,500 and less that AED 375,000/-per annum. It is mandatory for the business to register for VAT if its taxable supplies and imports exceed AED 375,000 per annum. The foreign businesses and investors will also recover the VAT that was paid by them upon visiting the UAE.

The Application Process for TRN

Login to your E-services Account

Open the portal of the federal tax authority and create your account for which you have to give the required information like email and password. After doing that, one receives the login information. In the UAE government, it is rather easy to register for VAT through an online portal.

The Step for Registration

After logging into the account, click on the button saying “register for VAT.” After clicking the button, one will be taken to a page displaying a VAT guide which would give all the information regarding VAT in UAE. Post, reading the guidelines thoroughly, click the checkbox that says “you conform to the guidelines,” and click on “proceed’.

Filling the Registration Form

A VAT application form will come up after clicking on “proceed’. The form consists of a total of 8 sections that have to be filled with the necessary details. The next page will appear after the completion of the first page. After filling up all the details, click on “Submit for Approval.” You will get an approval mail, and a TRN number with a VAT certificate would be sent. As per the regulation the FTA will issue TRN within 21 working days after submitting the complete registration.

Verification of the TRN Number

The following steps need to be followed for the verification of TRN Number

  • One has to log in on the E-services portal on the FTA website with the login credentials.
  • Click on “TRN verification,” and the verification page will open up.
  • Entering the TRN number in the search box will showcase the results for the TRN number.

Verification of the Tax Registration Number (TRN) is a simple process and has the potential to save a business from losses due to bad credit invoices.

Concluding the Scene

If you are in need of any assistance and support pertaining to the TRN registration, you can always contact us at info@aaccounting.me.

AUTHENTIC ACCOUNTING: Tax specialist in Dubai provides supports at all the stages.

ESR – Economic Substance Regulation- UAE

ESR – Economic Substance Regulation- UAE

Economic Substance Regulation- UAE

Why ?

The UAE introduced Economic Substance Regulations to honour the UAE’s commitment as a member of the OECD Inclusive Framework on BEPS, and in response to a review of the UAE tax framework by the EU which resulted in the UAE being included on the EU list of non-cooperative jurisdictions for tax purposes (EU Blacklist). The issuance of the Economic Substance Regulations on 30 April 2019 (the Regulations), and the subsequent release of the Guidance on the application of the Regulations on 11 September 2019, was a requirement for the removal of the UAE from the EU Blacklist on 10 October 2019. The purpose of the Regulations is to ensure that UAE entities that undertake certain activities (see question 4) are not used to artificially attract profits that are not commensurate with the economic activity undertaken in the UAE.

Who is subject to the Regulations?

The Regulations apply to UAE onshore and free zone companies, branches, partnerships, and other UAE business forms (referred to as Licensees) that carry out any of the following Relevant Activities. 

● Banking Businesses

● Insurance Businesses

● Investment Fund Management Businesses

● Lease-Finance Businesses

● Headquarter Businesses

● Shipping Businesses

● Holding Company Businesses

● Intellectual Property Businesses

● Distribution and Service Centre Businesses

Who needs to notify and by when?

Licensees that undertakes a Relevant Activity (irrespective of whether the Licensee qualifies for an exemption under the Regulations or has earned income from the Relevant Activity during the relevant financial period) need to submit a simple notification with its Regulatory Authority. Notifications for the financial period 2019 can be filed on or after 1 January 2020 and before the Deadline specified by the Relevant Regulatory Authority.  Most of the Authorities set the notification deadline as 30 June 2020.

Who needs to file an economic substance return and by when?

Only Licensees that earn income from a Relevant Activity during the relevant financial period and that are not exempt from the Regulations are required to demonstrate economic substance in the UAE and file an economic substance return. Economic substance returns must be filed within 12 months from the end of the relevant financial period.

Any penalties for non-compliance?

Penalties ranging from AED 10K to 300K may be applied for various non-compliance instances and Trade / commercial licence could be suspended, withdrawn or not renewed.

What Team Authentic Offers to its clients?

We at Authentic provides end to end bespoke accounting and tax solutions to our clients.  During this new phase of Regulations we help our clients in understanding and navigating through the whole process from the basic ESR testing to the Economic Substance Return.  For support please contact our office via our regular contact options, but in case you need personalized support please contact our relationship manager on +97156 5484635

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Outsourcing in Accounting

Outsourcing in Accounting

The main aim of a businessman is the expansion of the business. If the business grows, all the subsidiary factors will follow automatically. There is a whole lot of work that needs to be looked after in a business. Some of them are primary works and others are secondary services. The former one is a core group of works which make the backbone of any business and the latter are the supporting jacks.

The supporting-cast services, can be given to another company, who specializes in the related fields, so that the entrepreneur can focus his energies towards the core activity and the rest would be catered by the people, who are being paid for doing specific tasks for a business.

Defining Outsourcing

In general terms, the process of outsourcing, is, sending some of the business functions, outside the office to the specialists, who are well versed in handling particular functions. Nowadays, most of the big as well as small firms are turning towards outsourcing as a medium to make their business grow, to cut down on costs and to harvest the best output from the best in the business professionals.

To have an in-house accounting system, proves much more expensive than the outsourcing one.

Why go For Outsourcing?

Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize in their field. The outsourced vendors also have specific equipment and technical expertise, most of the times better than the ones at the outsourcing organization. Effectively the tasks can be completed faster and with better quality output.

Concentrating on core process rather than the supporting ones: Outsourcing the supporting processes gives the organization more time to strengthen their core business process.

Risk-sharing: one of the most crucial factors determining the outcome of a campaign is risk-analysis. Outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they plan your risk-mitigating factors better.

Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. This is one of the prime advantages of offshore outsourcing.

Considering an Outsourcing Firm

Outsourcing, no doubt has become a ladder, using which a business can fulfill its wish of the rapid growth. But before exploring the ocean of outsourcing, one has to keep certain things in mind:

  • The competency of an outsourcing firm- One has to be doubly sure about the competency of a firm, to which the work is to be outsourced.
  • Reputation Check- The reputation of a firm can be ensured by checking with the other clients that what words are spread about it in the business circuit.
  • Cost factor- It is perhaps the most important factor, which is to be taken care of with outsourcing is that how much load it would put on your pocket to get a certain work to be outsourced.

The Final Entry

After some intense brainstorming on accounting outsourcing, the conclusion drawn is much in favor of outsourcing than against it. If you are looking for an accounting outsourcing company in Dubai, then Authentic Accounting and Bookkeeping is a one-stop solution provider for all your accounting ins and outs.

Work with the Right Tax Expert for VAT Return Services

Work with the Right Tax Expert for VAT Return Services

Filing of VAT returns is extremely important for a business entity in the UAE. It is one of the must-do activities that businesses cannot simply afford to miss in the land. The VAT return is an official document pertaining to VAT or Value-Added Tax that is to be submitted with the Federal Tax Authority. As per taxation laws in UAE, the VAT return has to be submitted every quarter by registered business enterprises and taxable persons and that too before the due date.

Typically the VAT return document would explicitly display the tax due output and the tax recoverable input and the net VAT applicable. As per the existing laws, the document can be filed by a taxable person or a person appointed or authorized by the taxable person. This means that valid and registered Legal agents or Tax representatives can also file the VAT return on your behalf. Since it is legal to hire the services of an authorised tax agent, is it not better to go ahead with a firm that offers VAT return services at affordable prices and also has the know-how to compile relevant documents and information for VAT return filing as per the VAT laws of UAE?

Benefits of Hiring a VAT Return Service Provider

  1. The biggest benefit of outsourcing vat return services to an experienced service provider is that your business can take advantage of the knowledge base of the service provider. Since providing assistance with VAT return is their core area of work and specialization, they would be informed thoroughly about the latest laws pertaining to VAT and filing returns. Trying to file the returns on your own or using the services of an inexperienced service provider means risking a lot due to lack of requisite information and hands-on experience.
  2. The second benefit of outsourcing the work to an authorized person is that it will help save your time and effort which you can utilize to grow your business. Let people who specialize in VAT return services do the return compilation and filing on your behalf while you focus on your core areas of work.
  3. Another advantage is that these representatives are well aware of the due dates and other required guidelines for VAT return submission. Hence they will work in a way – either visit your office physically or work remotely – that the deadlines are always met and the correct documents and supporting are submitted thereby preventing you from paying hefty penalties and fines that you would have to incur in case you were to file the returns on your own without proper knowledge about the complex process of VAT return filing.

All in all, it is a win-win situation when you entrust the work of VAT return filing to an experienced and qualified professional offering affordable and comprehensive VAT return services. The leading service providers or VAT agents would have a robust setup equipped with the latest and advanced hardware and software to support multiple clients with their VAT return filings. They would ensure faster and systematic processes and procedures to compile and file the returns on time while validating the records and data provided by the business entities for compliance with the rules of the Federal Tax Authority. Professional VAT return service providers ensure that their clients are always kept up-to-date on the status of the return filing through extensive reports and customized formats.

The biggest plus point is that it is a cost-effective method of having your VAT returns filed on time. The best in the business would but obviously hire thoroughly qualified taxation specialists and accountants to do the work – affording such experts on the payroll may not be practically possible for all kinds of business entities.

Accounting Outsourcing: Credit more than you Debit

Accounting Outsourcing: Credit more than you Debit

Business is basically the rendering of goods and services, to make profit. Long gone are those days, when a service or good was exchanged in lieu of another good or service! Every business now finds its roots in monetary terms.

If finance has become such an integral part of human lives, then it is absolutely vital to have a proper system of accounting and book keeping. If a business owner wants a strong accounting system, then he has two options. Either he can go for an in-house accounting team or simply outsource the whole accounting operations, to a firm that specializes in handling accounts to get the best possible outcome.

Understanding Outsourcing

The process of outsourcing, in layman terms is, sending some of the business functions, outside the office to the specialists, who are well versed in handling particular functions. Nowadays, most of the big as well as small firms are turning towards outsourcing as a medium to make their business grow, to cut down on costs and to harvest the best output from the best in the business professionals.

To have an in-house accounting system, proves much more expensive than the outsourcing one because as a company owner, one need to formulate all the policies, which are a part of a company’s framework such as retirement plans, pension plans etc. Secondly, a constant inspection of their work needs to be done to ensure that everything is done in a proper manner.

Outsourcing- A Better Option

When you decide to outsource your accounting solutions, a lot of your tension, regarding the finances is out and the responsibility of catering the best services to the clients rests with the company. Outsourcing the accounting process, just for having a hassle free service ensures that it an enhancer of the worry-less approach in business.

  • This is certainly a time-saving technique, when there is no burden on you to handle accounts, you can focus on the more core things of your business like the development of the parent product, expansion of business etc.
  • If a company is equipped with adept accounting personnel, it will minimize the chances of accounting hiccups because a failure to get in terms with new legislations will induce an unnecessary fine and thus cutting-short the profit margins. If a nice playing around of the accounting tricks is done, it can save you from huge amount of taxes.
  • An associate accountant can act as a valuable asset for your business by providing objective input from somebody who is very well aware of your business, however doesn’t have the same emotional attachment. By helping you to make the correct judgments, he will assist you to grow your business. Accountants’ posses a deep insight to most of the financial issues that can suddenly spring out from thin air and can drain the finances, just as a leech would drain out the blood. So by fixing such loopholes, problems could be taken care of, before they become monstrous and start haunting your pockets.

What you need to keep in mind?

Outsourcing, no doubt has become a ladder, using which a business can fulfill its wish of the rapid growth. But before exploring the ocean of outsourcing, one has to keep certain things in mind.

  • The competency of an outsourcing firm- One has to be doubly sure about the competency of a firm, to which the work is to be outsourced.
  • Reputation Check- The reputation of a firm can be ensured by checking with the other clients that what words are spread about it in the business circuit.
  • Cost factor- It is perhaps the most important factor, which is to be taken care of with outsourcing is that how much load it would put on your pocket to get a certain work to be outsourced.

The Last Entry

After some intense brainstorming on accounting outsourcing, the conclusion drawn is much in favor of outsourcing than against it. If you are looking for an accounting outsourcing firm in Dubai, then Authentic Accounting and Bookkeeping is a one-stop solution provider for all your accounting ins and outs.

All You Need to Know About VAT De-registration in UAE

All You Need to Know About VAT De-registration in UAE

Tax De-registration is the provision for a registered taxable business or entity to cancel the VAT registration. It implies de-activation of the registration as well as the VAT number of the taxable entity. There are two conditions under which a business can apply for VAT de-registration in UAE:

a. The business stops making taxable supplies and does not expect to make any taxable supplies over the following12-month period.

OR

b. The taxable supplies or taxable expenses incurred by the business over a period of 12 consecutive months compares to be less than the voluntary registration threshold (AED 187,500) and it is not expected to cross this threshold in the following 30 days.

An important information regarding the same is that a business/entity that had voluntarily registered under VAT is not allowed to apply for de-registration in the following 12 months of the date of VAT registration.

Process of De-registration Under VAT in UAE

The process for de-registering under VAT is described as the following:

  • The company or business or any taxable entity can file for deregistration of VAT within 20 business days of occurrence of any of the two events mentioned above. What you need to ensure is that the due tax and penalties have all been paid. All the tax related formalities should be complete before you can deregister for VAT.
  • Once the application for deregistration gets approved, the VAT registration for the business would be cancelled with effect from last day of the tax period during which the event for de-registration had occurred or alternatively from a date decided by FTA. The registrant should ideally receive a notification on successful de-registration of VAT within 10 business days of the application getting approved.

What is Mandatory Tax De-registration?

Mandatory VAT de-registration is the phenomenon where the FTA cancels a business’s registration if it is found that the registrant satisfies either of the 2 conditions listed above for de-registration. This is called mandatory tax de-registration.

Hence, VAT de-registration is a welcome option for businesses that have registered under VAT but do not continue to make supplies that require registration. Such people/businesses do not require continuing with their registration of VAT and can apply for tax de-registration on satisfying the applicable conditions.

Importance of VAT Deregistration

As per the rules, a company cannot be dissolved officially until the process of VAT deregistration has been completed.

Moreover, it is also vital to inform the concerned authorities that there will no more be taxable income in the future after company dissolution. In case the company will not inform the authorities, it could result in major objections with respect to company dissolution. Moreover, unnecessary delays might also occur, involving extra fees at the same time.

While dissolving a company, it is essential to be well-informed and take the necessary steps towards completing the proceedings. It is also important to keep the concerned parties informed so that there are no issues.