Interview Question - What do you know about VAT?

Hi guys,

So I know from an academia point of view what value added tax is. How it is filed (every quarter or month), exemptions, rate, input vs output tax.. etc.

With respect to Dubai, is there anything extra-special about VAT? From what I know, everything seems standard but if anyone here working in finance, maybe they could let me know more?

So far in no particular order I know the following w.r.t.Dubai VAT:

Mandatory registration for AED 375,000+ revenue generating firms

VAT reg. number depends on the owner of the fir

If owner of business has 10 other business (where he influence control) then inter-company transactions are exempt for VAT

Rates are 5% or 0% or exempt

Registration is an easy online process, FTA is the legal authority.

Hopefully the responses will be helpful and will not culminate to those largely unexplained gags!

Edit: Formatting purposes

Dubai | 👁 1636 | Posted April 18, 2018 | Share on Facebook | Twitter | Google+

| Modified: April 18, 2018 | Author:


Chris_DXB 2 years ago

What many companies get wrong: There is a difference between "simplified Tax invoice" and "Tax invoice" (Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax) In title 13, Article (59) it says (I changed some wording and the list order to make it clearer): Simplified Tax Invoices, these are invoices below AED 10,000.-- or go to a private person (not a tax registrant): The words Tax Invoice. The name, address, and Tax Registration Number of seller. The date of issuing the Tax Invoice. A description of the Goods or Services supplied. The total amount and the Tax amount charged. "Normal Tax Invoices", these are more than AED 10,000.-- and go to a tax registrant (a company): The words Tax Invoice. The name, address, and Tax Registration Number of the vendor. The name, address, and Tax Registration Number of the recipient. A unique sequential Tax Invoice number. The date of issuing the Tax Invoice. The date of supply if different from the date the Tax Invoice was issued. A description of the Goods or Services supplied. For each Good or Service, the unit price, the quantity or volume supplied, the rate of Tax and the amount payable expressed in AED. The amount of any discount offered. The gross amount payable expressed in AED. The Tax amount payable expressed in AED.

ashelj 2 years ago

My limited understanding is 0% means you cannot charge VAT on your product or service (output) but can still claim back VAT on the supplies or services (input), with exempt you cannot charge nor recovery VAT.

linux_n00by 2 years ago

what's the difference between a 0% and Exempt?

itsameaitsamario 2 years ago

For whatever reason, your invoices should have TAX INVOICE in their titles. There is a confusion among companies and clients about invoices issued before jan 1st, for a service that goes on during 2018 (or further)

Gavtek 2 years ago

There are some strange rules that I dont know how they will play out in practice. For example invoices must be received with 14 days of service being rendered. This is not practical in many industries where invoices need to be accompanied with signed time sheets, completion certificates, etc. The laws make no reference to what happens if you receive an invoice 15 days after the services were rendered. Many of our suppliers are struggling to provide VAT-compliant invoices and we are discovering many grey areas.

TADubai2323 2 years ago

Nothing special as you mentioned. Given it is very new here, people are concentrating on the admin / transnational procedures required. IMO, following may be tested in interviews - -industry / segments in zero, exempt and standard categories. Real estate has some classification like first use and later. Life insurance is zero rated ...etc. -Understanding of reverse charge mechanism -Fenced zone transactions (different free zones) -Transnational procedure (Federal law clearly defines) - Portal , monthly, penalties, invoice details to be included ...etc. -How the share of different GCC countries works and how the different emirates share the revenue -general questions like how do you treat discounts, returns, transition period entries ...etc. Hope, it helps. Good luck.

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