I am a recruiter based in the UAE sourcing candidates for a applicant based in Bahrain. My applicant will appear to Dubai to annual the final candidates for a Bahrain-based role. He has no appointment or added operations in the UAE. Do I allegation to allegation VAT on my invoice? What would be the actual tax analysis if my applicant did the final interviews by blast from alfresco of the UAE? BL, Dubai
The basal aphorism is categorical in Article 29 of the Decree Law, which states that the accumulation of casework shall be the abode of abode of the supplier. The Decree Law and Executive Regulations go on to accord assertive exceptions to this aphorism and set out the altitude beneath which the accumulation of casework are advised to be an export, in which case they would be accountable to 0 per cent VAT, rather than 5 per cent. Article 31 of the Executive Regulations states that the accumulation of casework shall be zero-rated area the casework are supplied to a almsman who does not accept a abode of abode in an implementing accompaniment and who is alfresco the accompaniment at the time the casework are performed.
While your applicant does not accept a abode of abode in the UAE, in advancing to the UAE to annual candidates he is central the UAE in affiliation with the accumulation of your annual and accordingly it would be accountable to VAT at the accepted amount of 5 per cent. If he conducted the interviews accidentally by telephone, your casework would be advised an consign and accountable to VAT at 0 per cent.
It is annual acquainted that at some time in the future, back the VAT systems of GCC countries are linked, this annual would be accountable to VAT in Bahrain, rather than the UAE. This is covered in Article 30 of the Decree Law which states that area the almsman of casework has a abode of abode in addition implementing accompaniment and is registered for tax therein, the abode of accumulation shall be the abode of abode of the almsman of services. In this case you will not add VAT on your invoices and your applicant will annual for the ascribe and achievement VAT beneath the about-face allegation mechanism. However, until the VAT systems are aligned, your annual is either vatable at 5 per cent or 0 per cent depending on whether the annual is accustomed in the UAE or wholly outside.
My aggregation provides medical allowance for our employees, but additionally allows advisers to accommodate their dependants on the aggregation bloom action by deducting the amount of the premiums from the employee’s salary. What is the actual VAT analysis for this? Do I allegation to add VAT on the amounts answerable to my advisers for their dependants? PA, Dubai
The VAT that your aggregation is answerable on the dependants’ medical premiums cannot be deducted as ascribe VAT. This is in adverse to the VAT on your employees’ premiums, which is deductible. Interestingly, if you were based in Abu Dhabi, area there is a acknowledged claim to accommodate medical allowance to advisers and their dependants, you would be able to accost all the ascribe VAT on both employees’ and dependants’ premiums. In Dubai, because there is no acknowledged claim to accommodate bloom allowance to dependants, it is not a business amount and is accordingly not recoverable. This would be the case alike if the employee’s arrangement includes that the employer will accommodate it and pay for it.
What you are anecdotic is aloof casual on the abounding amount of the dependents’ premiums to your employees. There is no taxable accumulation complex in this and no “value added”. Therefore, you do not allegation to add added VAT on to the premium, which already includes VAT from the allowance provider.
I accept apprehend that that if the FTA wants to analysis me, I would allegation to accommodate article alleged an “FAF”. I am not assertive that my accounting arrangement produces this. Do I allegation to change accounting systems to one that is absolutely FTA-accredited and provides this book type? KS, Abu Dhabi
An FAF (FTA analysis file) is a specific book architecture that the FTA would appeal if you were accountable to a VAT audit. This book can be recreated in excel from your accounting records, so as continued as you can abstract all the accordant abstracts from your accepted accounting system, which you would use to adapt the FAF, you do not allegation to accept a arrangement that produces the FAF directly. It would absolutely be annual attractive at the requirements of an FAF and authoritative abiding that you are able to abstract all the abstracts required.
Lisa Martin, a accountant accountant with added than 20 years of bartering accounts experience, is the architect of accounting, auditing and VAT consultancy, The Counting House. Email any VAT queries to [email protected]
Updated: August 26, 2019 11:59 AM
Invoice Format With Vat In Uae – invoice format with vat in uae
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