Paying your VAT to the FTA by Profits Tax Consultants

That time of the year has arrived when many small businesses have submitted their VAT return and are now making VAT payment to the FTA.

Below are the options on how to make payment to the FTA (caution each one has a cost associated and you should check all options to find out which is the cheapest – we suggest the exchanges):

  1. Paying via e-Dirham or credit card through the FTA Portal.

Yes the most obvious is to log in and pay via e-dhirham or VISA and Mastercard. This option is simple, quick and for those last minute payments probably the best option. Although we have not tested the e-dhirham option the VISA and Mastercard do seem to be very expensive option.

  1. e-Debit payment option allows the Taxable Person to directly debit the amount to FTA’s bank account when making any due payments.

You can make a payment through e-debit and the fee for using eDebit is AED 10 which will be charged by e-Dirham. This option only works if you have a bank account with any of the following banks:

  • Citibank (Retail)
  • Commercial Bank of Dubai (Corporate and Retail)
  • Dubai Islamic Bank (Retail)
  • Emirates NBD (Corporate and Retail)
  • First Abu Dhabi Bank (Corporate and Retail)
  • Noor Bank (Retail)
  • Standard Chartered (Corporate and Retail)

Please note that this is an initial list of banks and the list may have changed and its ideal to check with your bank.

e-debit payment is made through the FTA portal by clicking ’Pay via Bank’.

  1. Paying via bank transfer (GIBAN). A GIBAN is a unique IBAN number that is given to every taxable person and should be displayed on your FTA Portal.

Once you get your GIBAN you can then proceed to make a normal local bank transfer via your bank and add the FTA as a beneficiary using the GIBAN number and FTA Details.

Please note this option can take up to 24hrs to appear in your account.

  1. Exchanges (UAE Exchange or Al-Ansari Exchange)

It is now possible to make a payment to the FTA through a number of the exchanges in Dubai. You will require the following information:

  • TRN No
  • GIBAN Number
  • Amount Payable
  • And take some ID (always handy)

REMEMBER: In case a payment is not received on time, a penalty of late payment will apply. In order for the payment to be credited to your account by the 28th you should make the payment before by the 25th of the month (at the latest). 

For help on submitting your VAT Return, Profits Tax Consultants offer a vat submission only package for AED 2000 per quarter. Visit our website on www.profitsplus.ae

This article was written by Ali Afzal, a tax consultant in Dubai and the Managing Director of Profits Tax Consultants.

It is possible that this information is out-of-date and you should confirm the facts by visiting the FTA Payment User Guide by clicking here.

How to register for VAT by Profits Tax Consultants

 

VAT Registration can be complex and getting it wrong could mean that your application is ‘denied’. We decided to write this article in order help applicants avoid the common errors that we have had to deal with on behalf of our clients.

About Us

Profits Tax Consultants is a tax consultancy and accounting firm based in Dubai and licensed by the DED. We provide fixed fee accounting services to businesses all over Dubai and Sharjah.  We provide free Vat Registration compliant software and we are the only firm in the UAE to provide real-time accounting services through our unique cloud accounting business model. Visit us on www.profitsplus.ae

VAT Registration – Mandatory

Ultimately if you are an existing business and in the last 12 months (no longer 2017 but till date)your sales exceeded AED 375,000 then you must register for VAT. This is considered Mandatory registration. If however your sales in the last 12 months were below AED 375,000 but above AED 187,500 then you can still register for VAT on a Voluntary basis.

Penalty Extension

Vat Registration for Businesses not registering could face a penalty of AED 20,000 as per the FTA and this deadline has now been extended to the end of April 2018. You must apply to register before this date.

Getting Started

Firstly, you need to create a user name and ID which is a very simple process and takes only 5mins. You can do that by visiting this link: https://eservices.tax.gov.ae/en-us/signup

Once registered you have to wait for the confirmation email to be sent to your email address used in the registration. Note: please do not forget your email ID and PW or security questions (and yes many people go forget).

 

Section 1 – About the applicant

Key mistakes made in this section are what to select when the trade license is a professional license? From our experience we have had no problems with selecting Legal person – Other and then entering Sole Establishment in the ‘If other, please specify’ section.

Also it is very important to select Mandatorily v’s Voluntarily. Only select Mandatorily if your past sales are over AED 375,000 otherwise always select Voluntarily.

 

Always select no to Tax Group unless you are registering for a Tax Group and this subject area will be covered in another article.

 

Section 2 – Details of the applicant

Legal entity name needs to be exact and do not worry about the Arabic as you can go to the DED website here: http://www.dubaided.ae/English/Pages/default.aspx and actually search your trade name and copy and paste the Arabic wording.

Trade License information should be exact and the rest of this section is pretty straightforward.

 

Section 3 – Contact details

A simple point to note here is that whatever contact number is entered here will  receive SMS updates from the FTA in regards to the Vat Registration matters of the company.

Section 4 – Bank Details

Bank details have not always been a mandatory requirement and in our opinion where it is voluntary I would just leave it blank. If mandatory then complete with the main bank account details used by the business.

 

Section 5 – Business Relationships (optional)

This section has always been optional and therefore we always choose not to complete this section.

 

Section 6  – About the VAT Registration

Very important section and a ‘must get right’ section. Select the closest activity as you will not always find the right activity.

Turnover is your gross sales for the last 12 months – NOT 12 months of 2017 – but the 12 months till the date of application. Upload of proof is nearly always optional and I would only use this section if you are a commercial landlord whereby you will need to upload the title deed of the commercial property.

Expect turnover in the next 30 days is provisional but try to keep it as realistic as possible and in any case is should be over AED 15,000 in order to qualify for Voluntary Registration.

Import and Export and the rest of these areas are a very technical point and not possible to discuss in this article. We may soon write an article on Import & Export and in that article we will cover this section in more detail.

For those of you who do not Import or Export then its simple NO, NO, NO, NO.

 

Section 7 – Declaration

The declaration will require you to enter all your details again and it does always ask for Proof of Authorization and in the past we have always uploaded the Visa Page of the Manager in this section as it effectively confirms that the person has a Manager Visa from the company and typically this seems to work as a POA to manage the affairs of the company.

If you are operating in the name of a local sponsor then you really need to get a Power of Authority letter drafted and signed by the sponsor giving you authority to act on behalf of the company ‘on all matters relating to VAT Accounting and the FTA’.

Section 8 – Review and Submit

I would recommend that you make a printout of the initial submission and review in detail against all IDs and make sure that it is 100% correct. This will save you weeks in time if it is submitted incorrectly.

Once submitted you must make sure that you always have access to the email ID used in the initial registration process as this is where all communication will be sent as well as the mobile number used.

The standard time is takes for the FTA to respond is 20 working days and they normally revert much sooner. Just expect that it can take up to 30 days in total.

If any amendments are required it is ideal to make them sooner than later.

That’s all from us at Profits Tax Consultants and remember we charge AED 500 to apply for your VAT Accounting although you could manage it yourself using this article. Contact us on www.profitsplus.ae

This article was written by Ali Afzal, a tax consultant in Dubai and the Managing Director of Profits Tax Consultants.

5 Killer must have’s [small business] by Profits Tax Consultants

Starting a small business is one of the toughest things you will do in your life, so its important that you are equipped with the best tools on the market to make it as easy as possible. The following are the tools you must have when starting a small business:

  1. Lead management system, or better known as CRM. It is critical to have a practical lead management system in place. Many small businesses spend thousand’s of £££ not to mention the time investment in tracking down their first few potential clients but when they are rejected they quickly move on to the next potential and never actually keep in touch with their initial leads.

Note, that it can take weeks, months or even years to build professional trust with some clients before actually closing any form of business, therefore it is vital to stay in touch with ALL clients in the past and this can be done cost effectively from the start if a good CRM is employed.

Here are a few suggestions:

There are many more out there and you should feel free to trial each one before reaching a decision. Important: Make sure that you are happy with the Email Integration options with whichever CRM you choose. It should be easy for you to send mass emails to the database.

  1. Good smartphone with ample data package. It maybe normal for teenagers to have the latest phone but it should be mandatory for an entrepreneur.

Imagine travelling to a meeting in the City on a train and finishing late, you are travelling back around 5pm and a new client wants to have a final chat regarding the proposal you just sent and then – shock – your phone beeps it’s ‘low battery’ indicator and its all apologies thereafter.

Try your best to take a new phone and ideally one with a good data package as google maps can really help when navigating around the city looking for that new meeting point.

  1. Email on the GO and all other business things mobile. Did you know that Microsoft recently made all their MS Apps available free to download to mobile platforms. Although we do need to take a break from work it is important to be able to access critical applications on the go if the need arises. I would recommend that you at least have your business email app, linkedin and whatsapp.
  2. Dropbox or Box for data in the cloud storage. Its important to keep all your files safe from thieves and yes if they steal your laptop or you drop it then at least your data is secure. 6 months of work is priceless to you compared to your laptop. So make sure you get into a good habit of working from the cloud and storing all your files straight to the cloud.
  3. Cloud Accountant. Profits Tax Consultants are committed to providing all accounting services through Xero Cloud Accounting Software. Getting to grips with the Profit and Loss is very important to start-ups and leaving it to an accountant who will produce your accounts after 15months at the earliest is just suicide. Cloud accountants like us help our clients produce monthly management reports through real-time accounting solutions like Xero which offer invoicing and payment integrations. Visit us on profitsplus.ae to learn more about of cost effective vat accounting packages.

In my opinion these are very important and critical items for entrepreneurs. Please feel free to share your suggestions.