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There are thousands of businesses already existing in the United Arab Emirates, and there are many more that are in the process of being set up. It is no surprise that many people choose to set up their business in the UAE, whether it is locals or foreign nationals since the economy is flourishing, and business owners are likely to earn major profits, that would, in turn, enable them to further expand their area of operation. Companies earn money or revenue, as it is known as, through a number of means, whether it is through providing services or manufacturing different products for mass consumption and one of the most common ways when it comes to product manufacturing is VAT or Value Added Tax.
What is Value Added Tax, and Who is a VAT Consultant?
The manufacturing of a product is a long process; there are a number of steps that go into creating a product from the beginning to end and manufacturers, add a consumption tax that is known as VAT or Value Added Tax where the tax value is added at each step of production till the point of sale. It is the user or purchaser of the product that is supposed to pay this VAT, and so, it is actually based on consumption and not on the consumer’s income, unlike income tax (this means that regardless of the consumer’s income; whether they more or less, they will have to pay the same VAT). The difference between VAT and sales tax is that VAT is paid at each point in the supply chain while sales tax is paid at the end, while both of them might produce the same amount of revenue. Many have criticized the idea of VAT since they believe that the government is able to earn without actually taxing higher-earners more than the others.
When it comes to a company or business, you are obligated to either charge a certain percent of the good’s value as Value Added Tax to those that buy or consume it or are obligated to pay VAT when consuming products. It is very important for you, as a business owner, to know just how to go about with respect to VAT, and this is what a VAT consultant helps with. In the simplest of words, a VAT consultant is a professional that is an expert in the area of VAT and is a great asset to have for businesses since they can help with VAT return filing, VAT registration, VAT audit, VAT consultancy, etc.
Why VAT Consultants are Important in the UAE
Dealing with Value Added Tax is a major part of how businesses run, and it also determines their finances in general. Given that the VAT to be charged is decided by the government, it is key that you do not fail to meet any requirements. In order to make all the right decisions with respect to VAT, here is why you should consider hiring a VAT consultant for your business:
- Subject Experts: Since the VAT is a tax decided by the government, it is an obligation for companies or businesses to pay on time. There are many companies that are not entirely familiar with the laws or rules pertaining to VAT or are simply not up to date with any updates or changes, and this is where a VAT consultant comes in. Consultants are experts in the said matter of Value Added Tax and would be able to educate you about the laws, the rates, and would also be able to help you calculate the amount the right way.
- Guaranteed Accuracy: Given the fact that VAT consultants are experts, they not only know how to get things done the right way, hiring them would assure you of the best results. They would make sure to ensure that you calculate the amount right, that your returns are filed, and that the information is free of any kind of error. Consultants take extra care when it comes to verifying VAT-related information; they not only go over everything themselves but also use the best technology for another layer of verification so that you can be sure to receive maximum satisfaction and only the best results.
- Experienced Professional: Not only are VAT consultants well educated in the field of VAT and related matters, but they are also highly experienced. Having worked in the field for a while means that they have not only managed to master their work and deliver accurate and desired results, they also know about what is going on when it comes to government’s tax policies, who all are targeted, how the VAT should be calculated for different kinds of businesses and would, therefore, be able to guide you better, would be able to make your work a lot easier and would also reduce the amount of time taken.
- Would Help with VAT Registrations: As a company that manufactures and sells products, you would surely be required to register yourself with the government so that they know about you and your operations, and so that you can easily manage your taxes, including VAT. Not only would you then be able to charge VAT on your products, but you would also be able to reclaim VAT that was charged by another business. There is a certain procedure that is involved in VAT registration, and a VAT consultant can explain the entire process to you and would also be able to help you with it.
- Maintain Records: Since a VAT consultant can advise you on how to calculate VAT for your products and how you should charge or would help with VAT registrations or VAT return filing requirements, it is important to have access to your financial records. One important role of a VAT consultant is to ensure that a proper record is maintained of your company’s finances and that any incoming or outgoing payments are recorded. In other words, a VAT consultant would help with the bookkeeping or accounting process and would help organize and systematize all the concerned data.
- A Global Perspective: Whether your company does business simply within the UAE or elsewhere as well, it is always in some sort of competition with other companies. Even if not in a competition, it is part of the global business network, and thus, it is not possible to ignore what the other companies are doing. By hiring a VAT consultant, you would have a way to know what the VAT-related laws are in the countries where you do business and how to calculate it, along with an idea of what some of the other companies are charging and how they are faring.
In order to ensure that you are following all the rules and regulations imposed on you by the government in terms of the taxes, and are manufacturing products according to them, it is crucial that you hire a VAT consultant who would be able to help you figure everything out and would also ensure that you are meeting all of the government’s requirements and are not a defaulter in any way. A company’s operations depend heavily on its finances, and a VAT consultant would be an excellent asset since you would have someone to inform you about other economic issues or about any kind of taxation policy introduced by the government.