Spreadsheets may have helped you a lot, however, is there perhaps a more advanced approach for you to stay updated all the time with minimal efforts?
As opposed to having your time detracted from you by the tiresome and repetitive tasks of adding data into a spreadsheet, which you can just do from one PC. The question is why not rather utilize a less complex process?
Cloud-based accounting is direct and offers an entire stack of advantages, including remote working and continuous updates.
In Dubai, firms have started asking their accounting partners to use cloud-based accounting technology to help them in filing their VAT returns. It has been enhancing their productivity of business workflow.
Today, most private companies favour cloud accounting to zero in on their overall business tasks. Cloud accounting suits every one of the necessities including globally coordinated effort, cost decrease, business development, and improved productivity.
Probably the best accounting tool permits businesses to smooth out their cycle, diminish human mistakes, and gain profitability through different integrations.
Advantages of Cloud Accounting in Dubai
Through Cloud-based accounting, you can maintain your business in the cloud in real-time. This enables organizations to follow the most recent laws and upgrades.
Companies and their bookkeepers can get access to the latest information from any device by working remotely. They can even work together at the same time from anywhere.
Protection and security is a key benefit while working with cloud-based accounting tools.
It monitors records and guarantees that information is always refreshed. While security is a significant concern, information is put away on different cloud servers with critical measures and guidelines to ensure it.
Cloud accounting can help firms to utilize constant information whenever to improve their key business choices.
Tips for small businesses registering for VAT in UAE
Basics of VAT
- VAT was introduced across the UAE on 1st January 2018 under Federal Decree-Law No.8 of 2017 – Article 13
- The Objective is somewhat to generate a new source of income for utilization of providing high-quality public services & facilities
- Tax Rates – Standard rate (5%) / Zero rate (0%) / Exempt
- Reverse Charge Mechanism (RCM)
- Effects/Implications of VAT on Businesses
First, we need to understand to whom the VAT is applicable
Any business or individuals who are making taxable supplies or providing taxable services or importing goods in UAE will require to register for VAT under mandatory or voluntary registration schemes
- Mandatory Registration means – Mandatory registration is due if previous 12 months or expected next 30 days taxable revenue or taxable expenses are due to reach AED 375,000/- ($100,000/-) in value. A business or individual with taxable supplies and due to reach a value of AED 375,000/- require to register mandatory to avoid administrative penalty of AED 20,000/-
- Voluntary Registration means – Voluntary registration is due if previous 12 months or expected next 30 days taxable revenue or taxable expenses are due to reach AED 187,500/- ($50,000/-) in value A business or individual with taxable supplies and due to reach a value of AED 187,500/- may opt to register voluntarily to benefit of claiming input VAT. Whereas failing to register under a voluntary threshold scheme will not counter any administrative fines
The word Taxable Supplies include:-
- Standard Rated Supplies of 5%
- Zero Rated Supplies of 0%
- Imported Goods & Services or AKA Reverse Charged Goods & Services.
- Exempt Supplies & Services are not included when calculating taxable supplies for the purpose of VAT registration.
Documents required for VAT registration in UAE
- Businesses Trade Licenses.
- Business Owner(s) & Company Emirates ID if visa Status is UAE Resident.
- Business Owner(s) & Company Manager Passport.
- Memorandum/Articles of Association.
- Business Complete Contact Details.
- Business Operational Bank Account Details and IBAN Verification Letter.
- Monthly Revenue Details for Last 12 Months and Next 30 days Expected.
- Monthly Taxable Expenses Details for Last 12 Months and Next 30 days Expected.
- Copies of Revenue Invoices & Taxable Expense Bills.
- Business Authorized Signatory Details Including Passport & Emirates if he/she, not an Owner or Manager. In few cases, POA may also require proof authorization
How Xero calculates VAT amounts
What you need to know
The returns use the detail from the transactions in Xero to calculate the VAT return box amounts. The VAT scheme from your financial settings controls the transactions the VAT return includes and when it includes them, based on VAT cash or accrual reporting requirements.
Xero uses the VAT tax rate selected for each line in a transaction to calculate the tax for the line. The total tax for the overall transaction is the total individual line amounts.
The accounting industry is seeing a major change in Dubai. Many accounting firms are worried about the new trends that are emerging and Covid is adding more burden. Leveraging cloud-based accounting software with the help of your accounting partner will be an amazing choice.
Zyla Accountants are a Xero gold partner that helps businesses carry out multiple accounting tasks with ease. If you are also confused about the proper usage of accounting software, feel free to reach out to our experts.