Entrepreneurs’ Organization (EO) UAE, the local chapter of the dynamic global network of entrepreneurs, reported that its members experienced a seamless transition to VAT this week.
This smooth period was attributed to the group’s efforts in 2017 to offer world-class peer-to-peer learning platforms and a selection of different UAE workshops hosted by local taxation experts, to help members understand and comply with the new regulations.
Here are Top 8 Tips for UAE entrepreneurs to help SME business owners avoid financial penalties that may be imposed due to violations, errors and incorrect record-keeping:
1- Maintain regular accounting books and records
Account maintenance is compulsory as a basic guideline for proper management and control of business operations. It is mandatory under UAE VAT Law and it facilitates the correct receipt and payment of cash and other transactions entered by a company.
2- Make changes to the core processes and accounting departments
It is important to change your core processes and adapt your accounting departments to achieve a reasonable degree of tax compliance. For SMEs, with limited transactions, the task is easier as the transition is less likely to require significant systematic change. Some technology companies have introduced digital solutions that help companies adjust their situations in line with the new tax.
3- Train staff, especially financial management
Employees need proper insight around GCC-wide initiatives to implement VAT across the region and how companies should prepare. Help them de-mystify VAT by providing on the job training and a framework to raise and clarify queries.
4- Renegotiate contracts and conditions agreed with dealers
Contracts are frequently issued without any contractual VAT protection for the supplier. Many businesses negotiated contracts at a time VAT was not payable but running the implementation dates. It is time to now bring contracts into step with the UAE’s economic context.
5- Consider electronic accounting software for bookkeeping
Nowadays, electronic reporting systems are increasingly being used by tax authorities. No doubt, technology can facilitate taxing and companies that use electronic invoicing are likely to improve the timing of VAT recovery on costs.
6- Adhere to VAT registration deadlines
Register your company to avoid a fine as severe as AED 20,000. The Federal Tax Authority (FTA) has already been kind enough to extend the deadline fixed as the 1st January but if you don’t complete VAT registrations you will also have to stop sales you get your tax registration certificate (TRC).
7- Study UAE tax legislation
The implementation of taxes in the UAE came with a whole new set of procedures. It is highly recommended to study and get familiar with the different laws in place including the UAE VAT Law.
8- Host or attend awareness workshops
We encourage you to keep attending various tax awareness programmes organized around the UAE which aim to keep the business community informed on new tax laws and compliance procedures.
Disclaimer: This is not a research report of Alya Almarzooqi Auditing and Chartered Accountants. These reviews should not be taken to constitute advice or recommendation. Alya Almarzooqi Auditing and Chartered Accountantsdoes not claim it to be accurate nor accept any responsibility for the same. Source of information: ameinfo.com