There are very strict rules and regulations regarding taxes, especially business taxes, in the UAE. According to the UAE government, they keep a check on every firm that they are paying tax as per rules or not. Therefore, business firms seek experts to handle all this matter.
There are tax agents who deal with all their tax issues because if they are not appropriately resolved, a company has to pay a heavy fine. So to run smoothly in the market, the business should be secured first by hiring a VAT Registration UAE expert.
What is VAT UAE?
It is a fine or a penalty that a firm or business has to pay, if the tax is not paid or there is any issue in it, the government makes addition to it with time. This is precisely according to VAT law UAE if it is not handled correctly. Let us know about the penalties that are imposed:
Prices of products are not written properly
If a company is not mentioning the prices of products properly, they have to pay the VAT penalty. It is stricter if the products are taxable. There are some exemptions, also.
First one is, if the customer or person concerned is already tax registered, there is an export of goods deal between the business and customer. There is a matter of importing goods and commodities; only then the firm will not be fined.
Therefore, if a company is not stating the prices accurately as per VAT UAE rules, then it will be imposed with huge penalties, if not handled (expertly) than there could be a downfall.
Notification issues regarding profit
When a company which is also registered with VAT fails to provide regular notifications to the tax authorities about how much profit margin they are getting by selling the products that they are dealing with, then they would be facing VAT penalty about more than 2500Dh. It will be called an administrative penalty.
Not following the storage procedure:
Some areas are said to be the VAT-free areas in the UAE. If a company stores its commodities in that area, they would not be penalized. But if the company has to store its products in the VAT UAE zones, then they have to pay the tax.
If they are not doing so, then a company can be burdened with 50000Dh, and it may increase if not paid according to VAT law UAE. Therefore, they must find a tax agent who can see everything regarding the storage of goods.
Not issuing tax invoice:
It is evident that a company registered should provide with a tax invoice to its client while making any deal or supplying the order. But sometimes business firms fail to provide those invoices and face the penalties. For your information, it is up to 5000Dh for each unissued invoice.
Not issuing tax credit notes:
If a company fails to issue the tax credit notes to its customers or clients, then they have to pay fine of almost 5000Dh as VAT penalty. Do remember, credit notes are the electronic notes that are written for every taxable item that the company produces so that the client gets to know the amount of tax that is imposed on a good by the government.
Not issuing of tax notes:
In the UAE, there is a rule; if a person or business is taxable, then, it must be provided with tax notes. If a business can keep a record of all tax invoices as per law. In that case, there is a guarantee of securing the legality of the contents of electronic tax invoices.
So, every company that suffers from a failure of all the above, securing the tax notes conditions, would be penalized by VAT.
From the above discussion, we have come to know about the VAT law UAE and the struggle that is done by the business holders there.
It might look over pressurizing on companies, but as per their laws and rules set by the tax authorities and the government, one has to pay all the taxes regularly.
Therefore, if you want to run any business in the UAE, then, you should keep all the wise penalty points in your mind