Submitting a VAT Correction?

Considering submitting a correction to your previously submitted vat calculations?

If you become aware that a VAT Return that you have submitted previously contains errors that resulted in a calculation of payable tax not more than AED 10,000, then you can correct this error in the current VAT Return in which you have discovered the error. Under the “VAT Amount” column, you should only declare the VAT amount of the correction.

If the error has resulted in a calculation of payable tax of more than AED 10,000, you should make a Voluntary Disclosure. We would urge you to review the FTA publication named Voluntary Disclosure

To avoid doing this incorrectly contact the experts.

Profits Plus Accountants

We are a British Accounting Firm based in Dubai and we help businesses navigate the FTA requirements using the most advanced cloud accounting software in the World.

We make sure that you remain 100% compliant.

As a Silver Partner of Xero Cloud Accounting Software, we have a local team based in Dubai with over 20 years of experience (collectively).

If you are looking for an accountant in Dubai then speak to Manam Tariq, Senior Accountant at the firm. You can reach him on accounts@profitsplus.ae.

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

What is a FAF File? [FTA Audit File]

fta audit file

The FTA has produced a very concise document on the required functions of accounting software which are needed to produce the FTA Audit files (“FAF”) for VAT and Excise Tax should they ever request it.

What is accounting software?

Accounting software should be a key part of any modern growing business whether a retail store or a service provider and it is not something reserved just for large corporations.

Currently, there are many accounting software solutions being used in the UAE the key players in the market are:

When selecting an accounting solution business owners should ensure that the solution complies with the FTA registration requirements.

Any competent accounting software should be able to produce Sales Invoice, Accounts Receivable, Accounts Payable, and General Ledger but the FTA has very specific requirements, namely the need to generate a FAF File.

FTA Audit File

FAF is something that could be requested by the FTA whilst conducting a periodic audit to ensure that tax and returns have been prepared correctly. It is strongly recommended that businesses check with their software vendors to make sure they are able to produce FTA Audit Files (FAF) if required, otherwise it would be a very costly exercise to do on-demand.

NOTE: It may be possible that your software is able to produce data in FAF but your accounting partner failed to implement and monitor the documenting of the transactions as per the FTA Requirements and you only realize when the FAF is requested at which point it could take weeks to rectify.

Key Elements to be present in the FTA Audit File (FAF) are:

  • Company Information such as Company Name and TRN No.
  • Master Files
    • Supplier File
      • Name of Supplier
      • Location of Supplier by Emirates
      • TRN No. if applicable
    • Customer File
      • Name of Customer
      • Location of Customer
      • TRN No. if applicable
    • Source Documents
      • Purchase Invoices, Imports, Credit Notes (with all details)
      • Sales Invoices, Credit Noted Issued to Customers (with all details)
      • Payments
        • Transaction Date
        • Payment Date
      • General Ledger
      • Product File

In summary, your accounting software must be able to produce all or any of the above if requested by the FTA during a periodic audit of your VAT Return.

Profits Plus Accountants

We are a British Accounting Firm based in Dubai and we help businesses navigate the FTA requirements using the cloud accounting software in the World.

We make sure that you remain 100% compliant.

As a Silver Partner of Xero Cloud Accounting Software, we have a local team based in Dubai with over 20 years of experience (collectively).

If you are looking for an accountant in Dubai then speak to Ali Afzal, a Managing Partner at the firm. You can reach him directly on a.afzal@profitsplus.ae.

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

5 Killer Solutions For Smart Business Owners

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 right tools to make it a success.

The following are the tools you must have when starting a smart business in UAE:

Lead management system

A good lead management system or better known as CRM is a crucial tool for any entrepreneur or a small business owner. Many small businesses spend thousand’s 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.

It can take 6-10 touches to close a prospect and it can take weeks, months or even years to build professional trust with some clients before actually do business with you. All these prospects and there the last conversation and the next action point need to be recorded in a smart, simple-to-use CRM solution.

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.

Smart Phone and Business Laptop

Using your old phone or laptop when meeting prospects does not cut it.  The number of times that I have met with owners pitching their services using their old phone and laptop and then apologising by saying ‘my laptop is old’ or ‘I don’t have data’, its just not the right approach.

Get a good smartphone with ample data and invest in a used Core i5 laptop at the minimum. If money is a problem then purchase a reconditioned laptop. I bought a reconditioned ThinkPad Corei5 for AED 1000 and its just a good looking powerful machine.

Latest smartphone with unlimited data seems to be normal for teenagers but it should be mandatory for an entrepreneur.

Email on the Go

Do not think that you are too big to not have access to your emails ‘all the time’.  I have read countless business blogs that preach leaving emails in the office and I doubt the writer of those blogs can actually afford to do that.

Email on the GO is mandatory.

Did you know that Microsoft recently made all their MS Apps available free to download to mobile platforms and G Suite for Business has always offered a free app that integrates with existing Gmail application.

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.

Cloud Storage (File Sharing)

Please tell me that you do not store your business files locally on your laptop or PC?

The only way to work is to have one of the cloud storage platforms setup on your working machine and are able to access it across all devices.

Check out the following options with brief explanations.

Dropbox is the best and its FREE. Its the most seamless solution on the market and simply works. However, if you start to build a team then you will need to use the paid version which is not so expensive.

Google Drive is great if you are collaborating on documents with other team members such as word or excel documents. It is free if you already have work Gmail or you can use your personal Gmail. Either way, its good but Dropbox is much more seamless when synchronising across several machines.

Cloud Accountant

If you are in business to make a profit (trust me not everyone thinks this) then you will need a committed accountant to help you understand if you are actually making a profit or if you are just turning over money.

Modern-day accountants still use traditional accounting methods, expecting to visit clients each month or the client visits the accountant to drop off his ‘books’. This is counterproductive and instead you should retain a cloud accountant such as Profits Plus Accountants.

Profits Plus Accountants are committed to providing all accounting services through Xero Cloud Accounting Software. Getting to grips with the Profit and Loss is very important to business owners and leaving it to an accountant who will produce your accounts after 15 months at the earliest is just business suicide.

Our dedicated team of qualified accountants help clients produce monthly management reports through real-time accounting solutions like Xero which offer invoicing and payment integrations.

Profits Plus Accountants

We are a British Accounting Firm based in Dubai and we help businesses navigate the FTA registration requirements using the most advanced cloud accounting software in the World.

We make sure that you remain 100% compliant.

As a Silver Partner of Xero Cloud Accounting Software, we have a local team based in Dubai with over 20 years of experience (collectively).

If you are looking for an accountant in Dubai then speak to Ali Afzal, a Managing Partner at the firm. You can reach him directly on a.afzal@profitsplus.ae.

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

 

Tally ERP 9 [9 Reason You Should Not Use Tally ERP 9]

Thinking of purchasing Tally ERP 9? Read this article before making that decision.

Disadvantages of Tally ERP 9
  1. Not user-friendly at all. I have met many CEO’s and In-House Accountants who contact me soon after setting up Tally ERP 9 and ask me to provide them with our accounting services simply because they realize how complex it is to use Tally ERP 9. Unless you are a qualified accountant or have employee a qualified accountant with at least 2 years’ experience Tally ERP 9 is just not user-friendly and thus not appropriate for small businesses with limited resources.
  2. Single screen software. Tally ERP 9 does not allow you to work on more than one ledger at a time which makes it difficult to review work whilst making entries into the ledger. This is a very basic function and means that it really slows down the accounting process.
  3. Useless paid upgrades. You have to purchase any upgrades and in fact, there is little noticeable difference between Tally 4 and Tally 9 but the cost of upgrading is expensive as you require the call out from Tally Partners and typically this will cost between AED 1000 and AED 2000 per installation.
  4. Not ideal for multi-branch. The only way to operate tally from multi-sites is to use VPN and this is hardly practical today. To make it effective you have to invest in servers and LAN bundled with Tally.net and then don’t forget the consultancy and implementation costs.
  5. No flexibility on Chart of Accounts. The default setting button is not provided and if you want to change the setting after configuration settings are done you will have to restart and delete all the ledgers and start again from the beginning. Once you have created the journal voucher it is not possible to make changes in it. This makes Tally 9 very rigid and difficult to use.
  6. No central support. Tally 9 is not supported centrally by Tally itself and instead, you have to rely on the partner network and the fees charged can vary significantly as well as the level of expertise, not always related.
  7. Low Security. Do not lose your password as it is difficult to retrieve data without the password and very time-consuming.
  8. Loss of data. Since Tally ERP 9 software is desktop or server based on the risk of losing your data is huge should your machine crash or become infected by a virus.
  9. No customization or module integration. It is not possible to customise Tally 9 or integrate with any other software.
Still thinking of purchasing Tally ERP 9?

I didn’t think so.

As an alternative consider Xero Cloud Accounting Software. We are a xero certified silver partner in Dubai and provide the software free of charge as part of our vat accounting packages.

VAT Registration in Dubai [Key Errors To Avoid]

VAT Registration can be complex and getting it wrong could mean that your application is ‘denied’ or you incur a penalty for incorrect submission. Getting it right could be a small matter of the dates or just a better understanding of the requirements.

Mandatory Threshold

Ultimately if you are an existing business and in the last 12 months 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 registration on a voluntary basis. The other mandatory requirement applies to expected sales of over AED 375k in the next 30 days. Remember that the sales are taxable sales and not sales that are not considered taxable supplies. If you are unsure if your sales are taxable or not then please contact a specialist to make sure since many services are taxable EVEN if they were delivered to clients outside the UAE.

Creating USER ID and Password

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 as this is not an easy problem to resolve.

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 (may apply if you have more than 2 companies in the UAE).

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 regular updates and notifications from the FTA in UAE.

Section 4 – Bank Details

Bank accounts are now a mandatory requirement to complete the FTA registration application for VAT registration in UAE and therefore if you do not have a business bank account then you cannot complete the application process.

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 in UAE

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. You will need provide a sales report and feel free to use our template letter VAT registration in UAE.

Expect turnover in the next 30 days, try to keep it as realistic as possible.

For those of you who do not Import or Export then its simple NO, NO, NO, NO for all questions relating to Import & Export.

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 a VAT registration in UAE and the FTA’ or use this template.

Section 8 – Review and Submit

I would recommend that you take 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 taken for the FTA in UAE to respond is 20 working days and they normally revert much sooner. Just expect that it can take up to 30 days in total for the VAT registration in UAE to complete.

If you have any amendments then it is ideal to make them sooner than later.

Profits Plus Accountants

We are a British Accounting Firm based in Dubai and we help businesses navigate the FTA requirements using the most advanced cloud accounting software in the World.

We make sure that you remain 100% compliant.

As a Silver Partner of Xero Cloud Accounting Software, we have a local team based in Dubai with over 20 years of experience (collectively).

If you are looking for an accountant in Dubai then speak to Ali Afzal, a Managing Partner at the firm. You can reach him directly on a.afzal@profitsplus.ae.

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

Cheapest Way To Pay VAT In The UAE [FACT]

How to pay the FTA your VAT

In this article, we discuss the methods of paying your VAT liability to the FTA:

  1. Paying via e-Dirham or credit card through the FTA Portal. Log in and pay via e-dirham or Credit Card (Visa or Mastercard). This option is simple, quick and for those last-minute payments probably the best option. 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.
  2. Paying via Bank Transfer (GIBAN) – Local Transfer. 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. In case you made the transfer to the wrong GIBAN, it is not the FTA’s responsibility to receive/ follow up on the payment and therefore, you are required to contact your bank and fix the matter. In case a payment is not received on time, a penalty of late payment will apply.
  3. Exchanges (UAE Exchange or Al-Ansari Exchange). It is now possible to make a payment to the FTA through a number of exchanges in Dubai. You will require the following information:
  • TRN No
  • GIBAN Number
  • Amount Payable
  • And take some ID (always handy)

This is the cheapest way to pay your VAT to the FTA but make sure to do it 2-3 days before the deadline.

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 Accounting and Bookkeeping offer a vat submission-only service. Visit our website on tax consultant in Dubai. 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 FTA Portal.