TOPIC: VAT RETURNS. Faculty Name:

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2 TOPIC: VAT RETURNS Faculty Name: 2

3 Tax Returns What is a Tax Return? Information and data specified for Tax purposes and to be submitted by Taxable Person in VAT Form 201 prescribed by FTA To be submitted at the end of each Tax Period. Standard tax period shall be a period of three calendar months ending on the date that the Authority determines Authorities have right to assign shorter or longer tax period to a person or class of persons 3

4 Tax Returns When and How to submit the return? To be submitted not later than 28 th day following the end of the relevant Tax Period In case the due date for filing Tax Return falls on a weekend or a national holiday, the deadline would get extended to the first business day thereafter In case of deregistration, final tax return to be submitted for the last tax period Return to be submitted online through FTA portal by logging into the e-services tab (eservices.tax.gov.ae) Return can be submitted by the Taxable Person, or another person who has the right to do so on behalf of the Taxable Person s (for example, a Tax Agent or a Legal Representative) 4

5 Tax Returns Staggers defined by FTA for return filing Staggers 1 st Tax Period in 2018 Tax Periods (following 1 st Tax Period) Due date of 1 st Tax Period VAT Stagger 1 (Tax Year end: 31 January of every year) 1 January 2018 to 30 April 2018 Feb Apr; May Jul; Aug Oct; Nov Jan 28 May or first business day after in case of public holiday / weekend VAT Stagger 2 (Tax Year end: last day of February of every year) 1 January 2018 to 31 May 2018 Mar May; Jun - Aug; Sep Nov; Dec Feb 28 Jun or first business day after in case of public holiday / weekend 5

6 Tax Returns Staggers defined by FTA for return filing Staggers 1 st Tax Period in 2018 Tax Periods (following 1 st Tax Period) Due date of 1 st Tax Period VAT Stagger 3 (Tax Year end: 31 March of every year) 1 January 2018 to 31 March 2018 Apr Jun; Jul Sep; Oct Dec; Jan Mar 28 April or first business day after in case of public holiday / weekend VAT Stagger 4 (Tax Year end: last day of the calendar year) 1 January 2018 to 31 January 2018 Monthly 28 Feb or first business day after in case of public holiday / weekend 6

7 Tax Returns What is included in the tax return? The name, address and TRN of the registrant The tax period to which the return relates The date of submission The value of taxable supplies subject to the standard rate of VAT in the tax period and the output tax charged The value of taxable supplies subject to the zero rate made in the tax period The value of exempt supplies made in the tax period The value of any supplies made in the tax period that will be subject to reverse charge VAT in the UAE and subject to VAT under clause (3) of Article 48 of the Decree Law The value of expenses incurred in respect of which the taxable person seeks to recover input tax and the amount of the recoverable tax The total value of tax due and recoverable tax for the tax period The payable / repayable tax for the tax period 7

8 Tax Returns Overview of return Sale & Outputs section Supplies of goods and services made which are subject to the standard rate of VAT per Emirate tax refunds you have provided to tourists under the Tax Refunds for Tourists Scheme, if you are a retailer and provide tax refunds to tourists in the UAE under the official tourists refund scheme; supplies of goods and services received by the Taxable Person which are subject to the reverse charge provisions supplies of goods and services made which are subject to the zero rate of VAT; supplies made which are exempt from VAT; goods imported into the UAE and have been declared through UAE customs; and where applicable, adjustments to goods imported into the UAE and which have been declared through UAE Customs. 8

9 Tax Returns Overview of a VAT return Expenses & all other Inputs section In the Expenses and all other Inputs section of the VAT return, a taxable person may declare any VAT which it has incurred on its purchases that it wants to recover : Standard rated expenses; Supplies subject to the reverse charge provisions On the basis of the information declared, VAT which is either due to be paid to the FTA or can be recovered from the FTA will be calculated: Payable tax for the period (This will indicate net payable or recoverable tax for the current tax period) = total value of due tax for the period less the total value of recoverable tax for the period; In case of net recoverable, there will be option to request a refund for the net amount of recoverable tax or will be entitled to carried forward to subsequent tax periods and set this off against subsequent payments (i.e. against any payable tax or administrative penalties imposed) due to the FTA. If option of refund of excess recoverable tax is selected, then taxable person will be required to complete the VAT refund application (Form 311) after the VAT return form is submitted Please note that all of the relevant Authorized Signatory details and information will be prepopulated based on the information that has already been provided upon the completion of Taxable Person records. 9

10 Steps to File VAT Returns Login to the FTA e-services Portal and navigate to VAT tab Complete the Form by filling in the details of the sales & all other outputs as well as on expenses and all other inputs Review of all information and Submitting the Form Settle the VAT Payable (if applicable) through My Payments tab 10

11 Navigation to e-service portal After login on e-service portal, click on VAT tab and select VAT201 VAT Returns Click on VAT 201 New VAT Return Points for consideration: - Automatically logged out after 10 minutes of inactivity - Save the progress - Review before submit 11

12 Basic Details Auto populated details of taxpayer/ representative member - TRN, name (in English and Arabic) and address. Auto populated details based on VAT return frequency 12

13 Standard Rated Outputs Points for consideration: - All amounts in AED - Amounts to be rounded off to nearest fils - All amounts to be aggregated at Tax Group Level - Insert 0 wherever necessary Emirates-wise reporting of standard rated output based on fixed establishment Standard rated output amount net of VAT - List of inclusion, exclusion and reductions - Corrections for errors from previous returns up to VAT amount of AED 10,000 VAT on standard rated output Adjustment of VAT on account of: - Bad debts - Sale of commercial property if buyer paying VAT 13

14 Zero rated Supplies & Exempt Supplies Examples of Zero rated supplies: - Export of goods and services - International transportation - First sale of residential building - Supply of commercial aircraft, vessel, bus and train - Investment in precious metals - Crude oil and natural gas products - Specified healthcare, education, etc. Not applicable Exempt supplies: - Specified financial services - Residential buildings other then zero rated - Bare land - Local passenger transport Points for consideration: - Zero rated and exempt supplies to be aggregated at Tax Group level for all Emirates - Corresponding expenses for zero rated supply Recoverable - Corresponding expenses for exempt supply Not recoverable 14

15 Reverse Charge Adjustment for Point 6 on account of - Mismatch in records of customs and taxpayer - Correction to customs declaration Amount can be either positive or negative Appropriate documentation required to justify adjustments Auto populated details of goods cleared by filing customs declaration Net amount of acquisitions subject to RCM at standard rate and zero rate includes: - Import of services - Specified local acquisitions subject to RCM (eg. Oil and gas products) Import from custom declaration to be excluded Details of transaction of goods cleared by filing customs declaration Points for consideration: Point 8 automatically calculates totals of previous points to arrive at total output tax due. Summation of amounts in Points 3, 6 and 7 to be reflected in Point 10 15

16 Expenses and all other inputs Net amount of standard rated expenses: - List of inclusion, exclusion and reductions - Recoverable expenses to be included - Corrections for errors from previous returns up to VAT amount of AED 10,000 - Voluntary disclosure for errors in excess of VAT amount of AED 10,000 VAT on standard rated input VAT adjustment for following: - VAT reversal on bad debts notified by supplier - Annual input tax credit apportionment - VAT reversal under capital asset scheme Sum of Points 3,6 and 7 to be reflected in Point 10 Recoverable VAT on reverse charge 16

17 Net VAT due and Declaration Auto populated details from VAT payable from Point 8, VAT receivable from Point 11 and Net VAT payable Declaration for operating Profit Margin Scheme Auto populated details of authorised signatory and declaration confirmation to be received after submission 17

18 VAT Payments When and How to make VAT Payments? Payment to be done after filing VAT Return; however before the prescribed timeline of 28 th day of the following month from the end of the relevant tax period Payments to be done using the e-services Portal and navigating to tab My Payments Payments can be made either using the e-dirham facility or a Credit card (Visa and MasterCard only) A payment using an e-dirham card will typically incur a charge of AED 3, while a payment using a credit card will typically incur a charge between 2% - 3% of the total payment amount Amount paid to be adjusted against the older liabilities of the Registrant and then the more recent ones would be adjusted e.g. if you make a payment, the VAT Return liability for the month of January will be paid before any VAT Return liability for the month of February Further, transaction History and payments can be viewed under the VAT Transaction History box placed within My Payments tab. These include your transactions and payments for your periodic VAT Returns as well as any penalties that could be applicable in relation to your VAT Returns, if applicable (e.g. late filings or payments for your VAT Returns or other) 18

19 VAT Payments If return is submitted, VAT liability payable will be reflected VAT Payment before filing return Pay through edirham or Non- edirham cards 19

20 Payment through e-dirham card Select edirham card Flat charge of AED 3 for payment through edirham cards 20

21 Payment through credit cards If non edirham card (Visa or Master Card) is selected for the payment of tax then it will typically incur an additional charge between 2%-3% of the total payment. 21

22 VAT Refund In case of net VAT recoverable, there will be an option to request a refund for the net amount of recoverable tax If option of refund of excess recoverable tax is selected, the taxable person will be required to submit the VAT refund application in Form 311 after submitting the VAT return The refund application will be reviewed within 20 business days and taxable person will be notified of acceptance or rejection of the refund claim In case the Authorities require the longer period for verification, the same will be notified to the concerned person Refund would be either paid or adjusted within 5 business days from date on which refund is approved 22

23 Penalties for Non-compliance Penalties that can be charged on a taxable person for late filing of a return or late payment of VAT are: AED 1,000 for the first ttime of occurrence of a delay. AED 2,000 in case of repetitive non-compliance within 24 months It should be noted that this penalty may also be imposed on a legal representative of a taxable person where the legal representative has not filed the VAT return as required. 23

24 Penalties for Non-compliance Penalty for failure to settle the payable VAT, as stated in the submitted VAT return, before the deadline:: 2% of the unpaid tax is due immediately once the payment of VAT is late 4% is due on the amount of tax which is still unpaid on the seventh day following the deadline for payment 1% daily penalty is charged on any amount that is still unpaid one calendar month following the deadline for payment with upper ceiling of (300%) 24

25 Penalties for Non-compliance In addition, a taxable person may be subject to a penalty if the information submitted in a VAT return is incorrect. In such situations, the following penalties will apply: Fixed Penalty of AED 3000 for the first time and AED 5000 in case of repetition Percentage based penalty on the amount unpaid to the FTA due to the error. Depending on whether or not the error was disclosed to the FTA, the penalty may be 5%, 30%, or 50% of the unpaid amount 25

26 Q n A session Part 1 The Institute of Chartered Accountants of India UAE (Dubai) 26

27 1. Advance payment 1a. What is VAT law for raising 25% Proforma Invoices for advance payments? Does this have to be in Tax invoice series number with 5% VAT, or just a dummy invoice which serves as a Request for Payment only? I have heard some companies send a dummy invoice and not book this, until paid. is this correct? Sujit Salian 1b. When after sending 25% PI, we get 25% money in, then what is accounting entry? At this time, do we send Tax Invoice for 25% only? what is accounting entry? 1c. Later when we send balance 75% invoice, is it ok to raise 100% then mention below 25% paid, then net we raise 75% value only? The Institute of Chartered Accountants of India UAE (Dubai) 27

28 2. Advance payment/designated Zone Somayajulu 1. Mainland company and Designated Zone company under same Tax Group... VAT treatment for transactions of Designated Zone company - a) Rules applicable for Mainland Company to be applied which is representative of the Tax Group? (or) b) Rules as applicable to Independent Transactions to be applied irrespective of the status of Tax Group? 2. Advances from Customers received before 2018 but not fully recovered by 31/12/2018, then which one to be followed - a) VAT is to be applied on unrecovered Advance as at 1/1/18 and submit a Tax Invoice to customer based on Article 80(1) (or) b) VAT is to be applied on Progress Billing value less Retention, (before deduction of Advance) based on Article 80(3) The Institute of Chartered Accountants of India UAE (Dubai) 28

29 3. Designated Zone- Real estate Velayudham we have taken Ware house from JAFZA /ADAC (designated zone )under lease contract for 5 years and to sub lease to other logistic company, Is this lease rent is taxable under VAT? The Institute of Chartered Accountants of India UAE (Dubai) 29

30 4. Fee, sale, exempt services Yash Hariyani 1)Purchase interchange fees earned by a credit card issuer and VAT aspects on the same. 2) VAT on sale of Repossessed cars by the bank against the auto loan sold by the bank (bank repossessed car as customer defaulted and sold the car to recover the auto loan outstanding.) 3) Recovery ratio computation for a business that is providing taxable as well as exempt services. The Institute of Chartered Accountants of India UAE (Dubai) 30

31 4. Place of supply- services Dheeraj Ranasaria If a registered company provides manpower service to any non-registered (non-resident) company in UAE, but the manpower posted in any retail counter (as sales person) in UAE then shall it be considered as zero rated supply (export of service)? The Institute of Chartered Accountants of India UAE (Dubai) 31

32 5. International transportation Sahej Transport services related to international transportation like taking goods from jabel Ali and delivering to main land is zero rated.. Then which documents are required to proof that it was international related services? The Institute of Chartered Accountants of India UAE (Dubai) 32

33 6. Import declaration Neetu Why free zone companies are required to file import declaration while exporting goods to Saudi by road The Institute of Chartered Accountants of India UAE (Dubai) 33

34 7. Rental invoices Abdul Hannan Chouhan Can input tax be recovered based on "Notice to pay" and "Proforma Invoice" from landlords for rental payments? Landlords are issuing Tax Invoice only after receiving rent payment. Also can PDC be considered a payment for tax purposes? The Institute of Chartered Accountants of India UAE (Dubai) 34

35 Recorded on: Date.. TOPIC: VAT AUDIT AND COMPLIANCE Faculty Name: 35

36 Journey So Far.. VAT Akbar Textiles LLC Address, Dubai TRN: Tax Invoice Sold to Abdullah Co. LLC Address, Dubai TRN: Invoice Num: 002 Invoice Date: 31-Jan-2018 Supply Date: 31-Jan-2018 Item Qty Rate Tax Rate Amount T-Shirt Medium Size % 1400 Total Before VAT 1400 VAT 70 Total 1470

37 VAT TAX AUDIT AND/OR TAX ASSESSMENT

38 Tax Assessment v/s Tax Audit Tax Audit is a procedure to inspect the records Tax Assessment is decision issued for Payable Tax or Refundable Tax

39 Tax Audit For Audit, FTA will request information from business in a prescribed format called FAF OR/AND FTA can conduct Tax Audit by inspecting premises, documents, assets and accounting system

40 FAF Audit Compliance VAT Customer Details Transaction Details Tax Details Foreign Currency Details Field Transaction 1 Transaction 2 Customer Name Abdullah Co. LLC Badshaah Brothers LLC Customer TRN Invoice Date Invoice Number Line Number 1 1 Product Description T-Shirt Medium Size 43 T-Shirt Medium Size 43 Supply Value AED VAT Value AED Tax Code SR SR Country FCY Code Supply FCY VAT FCY Exc el 40

41 FAF Audit Compliance VAT XML SuppDataStart Abdullah Co. LLC, , ,10345,1,, ,70.00,SR,,,0.00,0.00 Badshaah Brothers LLC, , ,43018,1,T-Shirt Medium Size 43, , ,SR,,,0.00,0.00 SuppDataEnd, ,2070,2 Accounting System Generating XML. 41

42 FAF Audit Compliance VAT SuppDataStart Abdullah Co. LLC, , ,10345,1,, ,70.00,SR,,,0.00,0.00 Badshaah Brothers LLC, , ,43018,1,T-Shirt Medium Size 43, , ,SR,,,0.00,0.00 SuppDataEnd, ,2070,2 SuppDataStart Indication of Data of Sales Abdullah Co. LLC Customer Name, Value Separator Customer TRN Number Invoice Date Invoice Number 1 Invoice Line Number,, Product Description Supply Value Excluding VAT VAT SR Tax Code SuppDataEnd Indication of End of Data Total Sales 2070 Total VAT 42

43 FAF Audit Compliance Similar Files need to be generated for Purchase Listings G e n e ral Ledger Listings C ompany Listing Supplier Details Transaction Details Tax Details Foreign Currency Details Transaction Details General Account Details Balances Taxable Person Details Tax Agent Details (if any) Period & FAF Versioning Details

44 Tax Audit For Audit, FTA will request information from business in a prescribed format called FAF OR FTA can conduct Tax Audit by inspecting premises, documents, assets and accounting system

45 FTA Tax Audit Who, Where and When VAT Tax Audit can be performed on any person Tax Audit can be performed at any place of business OR any other place from where Business is conducted Goods stored Records kept Tax Audit can be performed after providing 5 business days notice OR Without Prior Notice subject to certain conditions

46 FTA Tax Audit Who, Where and When VAT Conditions

47 FTA Tax Audit Who, Where and When VAT Tax Audit can be performed by even temporarily closing business of the person Serious Grounds to believe person s involvement in Tax Evasion, whether related to himself or any other person If the person attempts to hinder Tax Auditor s access after providing advance notice Serious Grounds to believe that if place not closed will hinder conduct of Tax Audit Prior Written Consent of Director General

48 FTA Tax Audit Who, Where and When VAT Permit from Public Prosecutor Before Expiry of 72 Hours 72 Hours

49 FTA Tax Audit Who, Where and When VAT Tax Audit will be performed during official working hours of Authority OR Outside working hours with permission Of Director General For Tax Audit, Place of Residence can also be accessed and temporarily closed SUBJECT TO Permit of Public Prosecutor

50 FTA Tax Audit Time Lapse VAT Tax Audit can be done for any period in last 5 years Taxa b le Pe rs on Jan 18 To Apr 18 5 Years from End of Tax Period 30-Apr-2023 Non Taxable Pe rs on Jan 18 To Apr 18 5 Years from End of Calendar Year 31-Dec-2023

51 FTA Tax Audit Time Lapse VAT FTA may inform the person to retain records for further period up to 4 Years Taxa b le Pe rs on Jan 18 To Apr 18 5 Years from End of Tax Period 30-Apr Apr-2027 Non Taxable Pe rs on Jan 18 To Apr 18 5 Years from End of Calendar Year 31-Dec Dec-2027

52 VAT TAX ASSESSMENT

53 Time Limit for Tax Assessment Tax Assessment Registered Non Registered Tax Evasion Proved Others 15 Years from end of Tax Period 5 Years from end of Tax Period 15 Years from date on which should have registered

54 Q n A session Part 2 The Institute of Chartered Accountants of India UAE (Dubai) 54

55 8. Import of service Naveen Arora Question-1 One of our Company is registered under laws of the UAE as Rak IC company. Our Company is getting consultancy to search for Natural Gas in Canada to set up Methanol project in Canada. The payments are being done from our company bank account in UAE for consultancy from a company in Canada. I would like to know If our company is liable for UAE VAT on consultancy payment to consultant in Canada for the services taken for the project in Canada. The Institute of Chartered Accountants of India UAE (Dubai) 55

56 9. Input vat labor accommoodation Rashmi Kedia Can we claim VAT input in respect of VAT incurred on water and Electricity/gas /food expense in relation to employee, where these all provided with labor accommodation? Food, other facility and accommodation are part of there labor contract. The Institute of Chartered Accountants of India UAE (Dubai) 56

57 10. Input vat- labor accommodation Rashmi Kedia Can we claim VAT input in respect of VAT incurred on water and Electricity/gas /food expense in relation to employee, where these all provided with labor accommodation? Food, other facility and accommodation are part of there labor contract. The Institute of Chartered Accountants of India UAE (Dubai) 57

58 11. VAT on gold Dilip Rathore Traders who are trading in Gold & diamonds & buyer has given them the declaration for resale hence no VAT will be charged by seller. Now can seller can take the input VAT credit on its expenses? The Institute of Chartered Accountants of India UAE (Dubai) 58

59 12. Import of goods and valuation Nagarajan If we import from Gcc country on statistical declaration the value declared for customs is original value of first import value. Where as sale to use is at higher value. Pl advice how to acct for the difference in value. As in customs auto populated figure is showing the sdf. Value. How to present in vat return. The Institute of Chartered Accountants of India UAE (Dubai) 59

60 13. VAT on joint property owners Sumit Shah A commercial property is held by 2 individual as per title deed and value of rental from the property is AED 500,000/- which is divided by 2 holders in 50% as per title deed. Now do they require to register & charge VAT or no need individual revenue is below threshold. The Institute of Chartered Accountants of India UAE (Dubai) 60

61 14. Export of services Ritesh Sarda A UAE entity is invoicing an another UAE entity for a service performed at Belgium & for an Mauritius company. Will it be Zero rated, out of scope or Standard rated supply? The Institute of Chartered Accountants of India UAE (Dubai) 61

62 15. Vat on services Manoj Agarwal Services rendered and enjoyed in UAE by non related businesses for client outside UAE, is VAT applicable. Please explain and appreciate reference of law/er. The Institute of Chartered Accountants of India UAE (Dubai) 62

63 16. Temporary import of goods Gopi Temporary import of good in to UAE will not appearing under customs reports in VAT file. Weather need to show temporary import items under RCM or not please clarify The Institute of Chartered Accountants of India UAE (Dubai) 63

64 Recorded on: Date.. TOPIC: RECENT VAT UPDATES Faculty Name: 64

65 Forex rates for VAT notified by Central Bank Of UAE (May 22, 2018) Weblink : &Itemid=59 Apply to all: All those UAE companies and individuals who raise Tax Invoices in a currency other than the UAE Import of concerned services from outside the UAE Updated Monday to Friday. based on forex rates prevailing at 6pm UAE time each day

66 Directors fee (APRIL 18, 2018) Independent director s services taxable. Directors are liable to register for VAT and charge VAT on the director fees Shareholder- dividend not vatable

67 Tax invoice/ Credit Note May 20, 2018 Mailing address of recipient acceptable Failure by the Taxable Person to issue the Tax invoice or an alternative document when making any supply or to issue a Tax Credit Note or an alternative document penalty is (5,000) for each tax invoice/ credit note or alternative document. Refer Article (59) of the executive regulations for requirements.

68 Tax Invoice Format The format is just for reference, you may align the contents to your format. The details outlined in previous slide are mandatory, other information is optional. In case Transaction is in any other currency, Taxable value and Tax value needs to be shown in AED. Date of Supply also needs to be added in case the same is different. Generally it shall be Deliver Order Number and Date. 68

69 VAT on Gold and Diamonds effective Jun 1, 2018 Whole seller: Sale to recipient- out of scope To mention TRN and recipient details on invoice. Show - sale on reverse charge Will not report in TAX return Recipient: Registered with TRN Gives indemnity Accounts as reverse charge in VAT return Sale to consumer: 5% on full value

70 VAT on Gold and Diamonds Dh. 265b industry, 85% export, of 15% retail- 60% to expats Prevent cash flow issues in Jewellery market Value added on every sale between B2B is prevented Compliance burden reduced This Decision only effectively applies to wholesale supplies of gold and diamond products. Sales of jewellery to the final consumer remain subject to VAT at 5%, and sales of investment metals remain subject to the zero rate as mentioned in the Executive Regulations.

71 VAT on Gold and Diamonds B2B- no VAT B2C- 5%

72 Declaration by Registered Recipient of Gold and Diamond

73 VAT REFUND FOR EXHIBITIONS AND CONFERENCES Supplier of event and conference services No vat recovered from exhibitor or attending delegate Issue tax invoice, charge vat and refund, stating supply falls under the special VAT refund scheme. Show as output vat in relevant emirates. Claim as refund in adjustment column in box 1. Conditions to be fulfilled

74 VAT REFUND FOR EXHIBITIONS AND CONFERENCES International Customer : Not having any Place of Establishment or a Fixed Establishment in UAE. is not registrant or required to register for VAT in the UAE Submit declaration in given format Refund scheme does not apply: If non-resident customer started making supplies in the UAE no minimum threshold for non-resident suppliers of goods and services

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76 Q n A session Part 3 The Institute of Chartered Accountants of India UAE (Dubai) 76

77 17. VAT on Business Acquisition Zuzar Netterwala Whether VAT is applicable on payment of purchase consideration for acquisition of existing company (Transfer of ownership) The Institute of Chartered Accountants of India UAE (Dubai) 77

78 18. VAT on Director s Compensation CA. SURESH KUMAR. C If the payment made to an Investor Director of a LLC Company, as a compensation for the extra efforts taken by him for running the business, will attract the provisions of VAT? The Institute of Chartered Accountants of India UAE (Dubai) 78

79 19. Job work in DZ Balaji R A DZ company is doing a job work for ML company where in the goods are provided by the ML company at free of cost. services, which includes additional goods, done on the goods supplied by the ML company should be charged VAT or not? in this case this transaction is reflecting in the ML company VAT return under item no:6 hence ML company refusing to pay VAT to the DZ company. advice us to resolve this issue The Institute of Chartered Accountants of India UAE (Dubai) 79

80 20. Input Credit in case of Late Registration J.K JAIN (1) The company imported and cleared the goods from Dubai Customs on 11th January when it was not registered, hence paid the VAT through clearing Agent, the company got registration on 21st January, how can we claim the Input credit for VAT paid. (2) The company imported the goods after Registration and paid RCM VAT and Customs duty on FULL quantity, but the actually part 25% of the goods were lost/stolen in transit, now the VAT output will be only on the 75% of the goods, how it should be The Institute of Chartered Accountants of India UAE (Dubai) 80

81 21. Vat on Share Brokerage Sunil Lakhani A company other than its normal business activity, is also buying and selling shares in Dubai Financial Market. Can the company claim input vat charged by the brokerage firm on their services The Institute of Chartered Accountants of India UAE (Dubai) 81

82 22. Export of Service Kintu Gandhi Generating business for India Client in UAE and we raise an invoice and collect fees from India for consultancy services. Should we treat it as a export of services or local service with 5% tax? The Institute of Chartered Accountants of India UAE (Dubai) 82

83 23. DZ Reporting Milan Shah 1.For a Designated Zone company, which is registered for VAT, and is having imports and exports, are these to be included in the VAT Return under RCM and zero rated sales respectively and if so please detail why given that DZ companies are supposed to be outside the country under the VAT Law? 2. What is the treatment under VAT for transactions between a DZ company which both buys from and sells goods to a mainland company which is also under the same Tax Group? The Institute of Chartered Accountants of India UAE (Dubai) 83

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85 23. VAT Invoice Banks often get legal opinions from uae lawyers on specific lending transactions and these are paid Krishnakuma directly by the client but often the invoice in the r banks name. How does the VAT cycle work in this case? Does the bank have to raise a VAT invoice? The Institute of Chartered Accountants of India UAE (Dubai) 85

86 23. VAT Return Sridhar Krishnan VAT website 'VAT On Expenses and All Other Inputs - Clause 9 Standard Rated Expenses' : Do we mention the amount in case of supplies only where VAT is applicable or the total payables. We work out of Jebel Ali and we do buy raw material from free zone suppliers which do not attract VAT and we have not included these supplies in the total amount. Is this correct? We render services in Turkmenistan thru a sub contract and the said company is registered in DMCC. Is this company liable to pay VAT and in turn charge us for services rendered in Turkmenistan but the amount is paid by us to the company registered in DMCC. 86 The Institute of Chartered Accountants of India UAE (Dubai)

87 23. Export of services Amit Taxability of vat, if event is outside UAE and supplier is in UAE and recepient is in UAE(recepient can be delegates who are going to visit outside UAE and sponsors who will sposnor for the event) want to know taxability for both the recipient The Institute of Chartered Accountants of India UAE (Dubai) 87

88 23. Inter company charge Ram Some computer relating services has been imported into UAE for two or three different entites having separate TRN. The invoice received is in the name of single entity which further cross charges to other entities. Being import that enity books RCM. The query is while cross charging to other entities should VAT to be charged?? The Institute of Chartered Accountants of India UAE (Dubai) 88

89 23. Real estate Sivasankar Since individual cannot do the real estate business in his individual capacity in UAE, Property is being managed and tax invoice raised by real estate company, which is fully owned by the same individual. In this case still the individual has to register for vat? The Institute of Chartered Accountants of India UAE (Dubai) 89

90 23. Export by road Arifa Supply to Oman made without necessary custom documents as the same are being cleared by the transportor showing his passport. The custom clearance bos mandated for this type of supply at the Oman border. Should the same be treated as export and zero rated?? As the customer there at Oman considers the same as import from Dubai...how to treat this transaction in VAT perspective.. The Institute of Chartered Accountants of India UAE (Dubai) 90

91 23. Exhibition Parth doshi Is the newly released refund scheme for foreign exhibitors to be madatorily be followed by the supplier of exhibition services to foreign exhibitors?? As the scheme requires heavy documentation to be maintained. The Institute of Chartered Accountants of India UAE (Dubai) 91

92 23. Vat on out of scope Manoj Kumar Goods physically delivered from overseas country ( manufacturing co ) to designated zone customer, but invoice issued by main land company to designated zone co without mentioning VAT. Is that ok, and what documents shall keep for the same. The Institute of Chartered Accountants of India UAE (Dubai) 92

93 23. Importer on record Kamlesh Goods imported into UAE by company A but it was import of company B so import purchase it booked in company B, so how to treat RCM in this case because RCM is auto populated in company A but RCM should be booked in company B, how corrections should be done?? The Institute of Chartered Accountants of India UAE (Dubai) 93

94 23. Importer on record Sonam What documents should be mainatained by CHA to prove transportation to be said as Zero rated in case of international movement of goods and what about, reimbursement of expenses what documents should be maintained? The Institute of Chartered Accountants of India UAE (Dubai) 94

95 23.Export of service Mohamadall y Ladha A commission agent getting commission from foreign company for soliciting business in uae on behalf of foreign company. Is the income vatable. The Institute of Chartered Accountants of India UAE (Dubai) 95

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