What is VAT?
VAT is a specialized tax that is imposed on all services and goods and basically translates to Value Added Tax. It is in fact a consumption tax. This tax faces increment on the basis of the increment of product value during the actual process of production. Also VAT is levied as a destination-based tax, i.e. the value of the tax would depend mostly on the location of the customer or buyer or the product or services. VATs face an increase of a fifth of total tax revenues, worldwide. By 2018, a total of 166 countries (out of a total of approximately 193 countries) have levied a VAT worldwide (which is inclusive of the sales tax).
One can calculate VAT in two different ways. The first calculation is based on the invoice or credit invoice based methodology. The second calculation method is based on accounts or subtraction. The first calculation is usually followed in several countries with the only exception being Japan. The second method is deployed for calculation of the sales value which is taxable. Thereafter, the taxable purchase amount is subtracted from the same. The remainder is the amount on which there is the application of VAT.
It has standard rates in different countries. 5% is the regular VAT rate for the United Arab Emirates (UAE).
So if you want to take help of VAT consultancy services in UAE, give Xcel Accounting a call. You can rest assured that with Xcel Accounting you are seeking assistance of some of the best VAT consultants in UAE.
To run a business smoothly, you will in fact need VAT consultancy services. The VAT that was levied in the UAE on the 1st of January 2018 had certain criteria to be fulfilled by running businesses. They are –
Any business, big or small, is supposed to register for VAT, if the annual VAT taxable turnover of the company exceeds a certain value. AED 375,000 is the registration limit which is compulsory.
If there is a voluntary registration for VAT, it will only be possible if the turnover of the said business is below the aforementioned mandatory registration threshold. But in this case, the turnover of the business should exceed a total amount of AED 187,500.
VAT is a pressing finance problem that is a concern for all. Up and coming businesses need to register for VAT before time and thus for that more than often they require services of VAT consultancy firms, luckily, for people of the UAE, there is Xcel Accounting, which employ the best VAT consultant in Dubai.