Krestonmenon

It is mandatory that every business in UAE should register for the Value Added System in UAE but some business entities can't undergo VAT registration and some services or goods can't be subjected to the VAT system in UAE. These are referred to as VAT exemption. Tax varies according to the place and type of products and to the original sales price, an indirect tax is being added when most products are sold anywhere in the region. As per Federal Tax Authority directives, services or products that are not subjected to be taxed are exempt from the Value Added Tax. For being VAT exempt, the business hat to sell product that are VAT exempt and a non-profit should not involve in taxable business activities. Perfect VAT consultant in Dubai can assist you in all VAT related issues as it is a challenging area of a business. In UAE, most of the products and services are taxed at five percent and some are considered as VAT exempt as it is essential. To consider a product or service as exempted from VAT, some conditions in the UAE VAT act should be fulfilled. VAT exempted Goods and Services in UAE 1.Selected financial services 2.Bare lands 3.Local passenger transportation services 4.Residential buildings with lease more than 6 months VAT Exemption and Zero Rated products Most of us get confused with VAT exemption and zero-rated products or services, they are not the same. Although there is no additional charges rely on product and services that are zero-rated or vat-exempt but they are not the same where zero-rated products are still taxable and for an exempted product, it is not. The zero-rated products are considered as the taxable turnover of a business whereas VAT exempt products are considered in the regular book of a business. If the product of a business supplies VAT exempt product, then the entire business is considered as VAT exempt. Unlike taxable business some differences of VAT exempt businesses are: 1.For every sale, they can't charge the current VAT rate. 2.It is not possible to reclaim VAT on any business expense 3.Even if their purchase include VAT charge, they can't reclaim VAT 4.Not required to file VAT returns 5.Not required to maintain and update VAT records Partial VAT Exemption Some businesses are exempted partially as the company has registered for VAT and trade both taxable and VAT exempt products or services. Partially exempted company can reclaim the incurred VAT from the purchase or production of VAT exempt products or services. The partially exempted business should maintain separate accounts for VAT exempt sales and records of VAT calculation. VAT records are required for VAT return filing. All the charities are VAT exempted as they are not involved in any business activities and not selling taxable products or services. For assistance in VAT, you can choose external consultancy and many audit firms in Dubai provide taxation services. While choosing a peripheral consultancy, you should check the year of experience of the firm and the remuneration for their services. Depending on different policies offered by the firm, different criteria are used to calculate the fee of that firm. Some firm charge according to the services they offer where some others charge by minutes. Select wisely.