COMPLIANCE REQUIREMENTS
1. Maintenance of books of account
FTA insist on all the companies to maintain their books of account properly for the effective compliance of VAT
Book Keeping (To be retained for the next 5 years starting from 1st January 2018)
Annual accounts
General ledger
Purchase ledger
Sales ledger
Invoices, Credit notes & Debit notes
VAT Account classifying Output VAT, Input VAT & VAT Payable
Additional records (Hard copies to be kept and retained for the next 5 years)
All tax invoices & alternative documents relating the same
All purchase invoices & details of input claim
Goods & Services used for matters not related to business
Details of all import & export transactions
VAT payment details, VAT returns, Correction return details etc
2. VAT Invoices
All VAT registered dealers should issue a VAT invoice within 14 days from the date of supply of goods. To be a valid Tax invoice, a taxable person should include the following information in their invoice:
It should be a written document which records the details of a taxable supply made
A sequential number which uniquely identifies the document
Date of issue of invoice
The Name, address & TRN number
Description & quantity of goods
VAT amount and the rate applied should be shown separately
Total amount of VAT expressed in UAE dirhams together with the rate of exchange applies and source of that rate
Errors in VAT invoice during issue
If the VAT collected is higher that the rate specified, surplus amount should be paid to government & if its less than the required rate, actual VAT should be paid to the government
3. VAT Return fillings
Submission
VAT return is submitted online and only in very limited circumstances (at the sole discretion of FTA) on paper
Deadline
Return should be submitted within 28 days from the end of the return period (If the return period is January-March 2017, the due date is April 28,2017). Where the due date falls on a weekend or national holiday, the deadline shall be extended to the first following working day
Late submission
Late submission can attract penalty levied by the FTA
Errors in return submission
Where an error has been made on a VAT return submitted within the last 5 years, then the taxable person must disclose this error to the FTA within 30 days of becoming aware of the error.
Emirates level reporting
Taxable Persons will be required to report details of the value of supplies made in each Emirate on their VAT returns.
4. TAX Audit
FTA can visit our premises any time of their like and inspect their records and make sure that people are paying taxes correctly.
Points to consider
Usually done by a FTA official
Will be informed prior to 5 business days before audit
Its done at our business premises
They can close the place of business for upto 72 hours(if suspecting tax evasion)
They can take request any records of their like and can also remove sample for enquiry purposes
The business owners will be informed the results within 10 business days after the end of audit
5. Penalties
Administrative penalties (Not less than Aed 500 and note more than 3 times the amount of tax for which penalty was levied)
These penalties are intended to address non-compliance and encourage compliance
The FTA have the power to waive and reduce penalties at their discretion
Example: If the person conducting business fails to keep records properly
Tax evasion penalties (Upto 5 times the relevant tax at stake)
For those person who used illegal means to either lower tax or not pay the due tax or to obtain a refund for which he is not entitled under law
The imposition of a penalty under law does not prevent other penalties being issues under other laws
Example: If a person deliberately provides false information and data