UAE has successfully completed the first year of the implementation of VAT. According to most sources, implementation of VAT was smooth, transparent and successful despite some initial challenges. The Federal Tax Authority (FTA) was proactive in publishing user and industry guides as a part of pre-implementation and post-implementation process/support which was a key reason for this success. Another was tax consultants and tax agents that supported companies and taxable persons in the UAE to get compliant with the VAT regime.
VAT, at one year of age, is a relatively new concept for many UAE businesses. Most businesses find it difficult to navigate VAT on their own due to little or no exposure to tax in the UAE. As a taxable entity, it is crucial to ensure that the business is compliant to VAT laws and regulations. Having a tax expert on your side is imperative to avoid errors, penalties and loss of reputation.
Why Companies Require Tax Consultants/Agents In The UAE?
- A tax consultant/agent raises awareness and helps businesses to stay true with the VAT regime whilst an appointed tax agent can act as an intermediary between the FTA and the business.
- Undertaking the VAT assessment of a business by a tax consultant helps it to prepare for all the processes it needs to undertake and the changes that must be made to work-flow, documentation, accounting, invoicing and ultimately reporting with minimal human inputs.
- Tax consultants also assist businesses in registering in time and ensuring that they meet the registration criteria including Tax Group registrations.
- The primary role of a tax consultant, after the initial registration and assessment is to ensure accurate, timely and reliable VAT returns.
- By using their expertise, tax agents and consultants assist businesses to avoid errors, claim rightful input taxes to maximise profits and help businesses to best manage their cash flows, especially when credit periods to customers exceed the VAT returns period.
- Tax consultants/agents can also assist in reviewing the VAT returns already filed (health-checks) for accuracy and documentation/records maintained by the taxable persons as per the requirements of the tax law.
- Appointed Tax Agents are also able to assist businesses with tax audits and responding/representing the taxable person with the FTA in case of queries. This includes Arabic language capabilities as Tax Agents are mandated to have this capability.
- Tax agents are often required to liaise with the FTA on behalf of the client for dispute resolution and reconsideration of decisions issued by the FTA. This can lead to significant savings for the business.
- Tax laws are subject to change from time to time and keeping abreast of all relevant statutes and laws is the need of the hour. Tax consultants/agent by doing so ensure that businesses do not fall foul on account of not keeping up with the latest regulations and incur penalties.
Tax Agents Are Certified Professionals
Though any professional with requisite qualification and tax experience may assist businesses as tax consultant or advisor, FTA governs individuals and firms that can act as Tax Agents / Tax Agency in the UAE. The FTA has set certain criteria for Firms and individuals before they can act as Tax Agents/ Agency. Some of the criteria are set out below. As is evident, it is FTA’s endeavour to ensure that capable and qualified individuals act as Tax agents so that they are equipped to advise businesses in the UAE.
- A minimum of three years of practical experience in taxation, accountancy or Law.
- Proficiency in both Arabic and English languages.
- Should have qualifications such as Bachelor’s or Master’s degree in tax, law, or accounting from an accredited educational institution.
- Pass the FTA examination with a passing grade.
- Physical fitness to undertake the duties and responsibilities as a tax agent.
- Must be covered by professional indemnity insurance.
- Must possess a clean record with no crime or misconduct.
PKF UAE- Your Tax Agent/Advisor
PKF UAE has been based in the UAE since 1976 and offers many services from its 8 offices in the UAE. VAT advisory is one such service, led by a Senior Partner and Director based out of the Head office in Dubai.
The VAT advisory team is well placed to offer end to end services in the VAT domain in the UAE, all the way from VAT assessment, registration, reviews, assistance with filing and ongoing advisory to liaising with the FTA for dispute resolution and reconsideration.
In addition to having many professionals with rich tax experience in its VAT team, PKF UAE is also registered as a Tax Agency with the FTA and offers both English and Arabic capabilities. The team has extensive experience of VAT in the UAE having advised several clients in a variety of ways in the VAT value chain over the last 18 months.
PKF UAE provides professional, timely and relevant advice to businesses and clients to ensure they comply with the applicable rules and regulations and optimise their VAT returns and plan their activities accordingly.
VAT compliance can be time and energy consuming and prone to errors and lapses, leading to expensive fines and penalties. PKF UAE can assist you to ensure that your business is always on top of things related to VAT with the least risk of loss of reputation and avoiding fines and penalties.