VAT: How and Why Does It Make A Difference To You?

The Gulf countries have always enjoyed a comfortable existence and regarded as a rich oil-producing region with a strong economy. However, crashing oil prices in the region have led the government to introduce a value-added tax of 5 percent on goods and services from 1 January 2018 to improve the economy. UAE has always had a strong welfare system but with changing times and to reduce the hydrocarbons dependency, the government has Introduced VAT which provides a new source of income to the economy and helps the government achieve a new vision. After its implementation registered businesses and traders will be required to fully document-related costs and incomes. They are required to record their financial transactions and ensure that their financial records are accurate and updated. The VAT will be charged on the customers at the prevailing rates for using goods and services except for bare land and transport services.

Dubai benefits from tourism spending and economic activities. It has even collected a large amount of tax among the seven emirates in 2018-2019. This has led to a GDP growth rate of 3.5 percent when the federal tax authority collected a large amount of revenue surpassing its annual target. It is important to manage your account and avoid any type of late fees. As a business owner, you need a professional VAT Accounting Services Dubai to help you file your returns on time and manage to account. If you are looking for a firm who has full knowledge about VAT you need to consider a few important factors.

Benefits of Hiring Consultants for Businesses

1.    A consultant specialized in VAT Services is ideal for UAE based businesses to file financial details in the government record due to its complexity. VAT registration will help you in filing VAT returns on time to avoid penalties incurred by the Federal TAX Authority (FTA). A good consultant will be able to help you with running your company.
2.   Hire a consultant who has knowledge about VAT related laws and can keep a record of goods and services imported and exported. A suitable consultant can understand the small issues impacting a company and save it from any kind of damage.
3.   Hiring a consultant can help you in analyzing, assessment of human capital and measurement of the risk associated with the revenue and tax payments and save a lot of time. They are also responsible to estimate the net cost to the company after implementing VAT and compliance.
4.   A good consultant understands the law based on industry. For example, a consultant knows which sector has VAT applied and which has no VAT implementation. If the consultant is determined to run a company’s function smoothly by keeping business goals, model, operating structure and requirement in mind, it means you are hiring the right consultant.
5.   A good consultant has efficient resources that have properly planned strategies to manage VAT with routine operations and minimum time spent with a goal of zero percent errors.

It is better idea for small business owners to hire a local financial service provider rather than outsourcing the delicate job to any outsourcing company overseas to reduce cost and get timely service.