Skip to main content

I am a vat consultant in uae.

uaevatexpert.ae/

Harry jonson

Know the basics of opening an LLC company in Dubai

3 min read

Dubai has developed itself as one of the best business destinations that can be found across the globe in the bygone years. Investors look for LLC company formation in Dubai. The main reasons are, Dubai provides diverse business policies, and the company is also exempted from charges.

An LLC company formation in Dubai requires only two shareholders, and the number can reach up to fifty. However, investors should note that they will need a local sponsor who will hold 51% of the shares in the company.

However, there is nothing to worry about this business setup in Dubai because the local sponsor is a silent partner. He will not be involved with the daily work process of the company. Investors just need to pay an annual fee to him and take home the profits.

The capital requirement to form an LLC is the minimum. However, it depends on the nature of the business. But presently, the investors do not have to submit any auditor certificate or bank deposit certificate.

 

What are the documents required for an LLC company formation?

Below are the documents required for an LLC company formation:

·         The application form for company registration from the Dubai economic development

·         An attested copy of the Memorandum of Association from a public notary

·         An approval copy from the Dubai economic development

·         The reservation copy of the trade and company

·         A photocopy of the investor's passport

·         A photocopy of the local sponsor’s passport

·         A photocopy of the manager’s passport

·         Attested contract copy of the warehouse or office. This must be attested by the Dubai municipality’s civil defense department and the planning department.

·         The location plan. This must be attached to the official contract.

·         If the investor has a resident visa in UAE, a NOC is required from the sponsor.

 

How can investors apply for an LLC company formation?

·         The investor must select a name for his business

·         He must choose a proper location for his business

·         He must also mention the business activities that his company will carry out.

·         He must collect all the above mentioned documents and submit them to the department of economic development

·         If there are any special business activities that involve finance and banking, the investor must get approval from the required government authorities.

Once the investor gets the initial approval, he must get the required trade licenses. The other documents that are share certificates, tenancy agreements, memorandum of association, certificate of incorporation, etc.

 

To conclude, as an investor, it is necessary for you to know what is the application procedure and the required documents to set up a company. When you know these things, you will find it easy to open an LLC company. 

Harry jonson

How Vat in UAE works on goods?

2 min read

When you talk about Vat in UAE, you need to know the whole story behind it. It is not about business within the country, but vat also falls under goods that are imported or exported from the country. Foreign exchange and trade are most essential parts of economical growth where Vat is an inevitable part.

So, this blog will discuss about the types of goods that fall under Vat in UAE. Tax agents in Dubai are also an important part of it as they know all the knitty-gritty behind it.

There are mainly two types of goods.

·        Concerned goods: - This falls under the category of imported goods. It can be said that this goods fall under the Vat regulations of UAE. But, you need to keep in mind that concerned goods are not exempt from Vat implementation. This goods need to have proper regulations and documentations to enter the market. Therefore, proper legalization is very much important for concerned goods.

 

·        Concerned Services:- These are the types of goods that are supposed to be supplied within the country and exempted from the Vat category. It can be said that when such goods are found and reverse charge supplies is implemented, and then Vat in Dubai is the most essential thing to make these goods supplied in the UAE market.

 

The recipients of all these goods are needed to show the net value of the same. Services that are coming from the foreign suppliers are subjected to show the rate of VAT(VAT advisory).




 

Different goods have different VAT. When these goods are subjected to supply, the VAT implementation is the indispensible part. The legal matters related to goods and then Vat is the most important matters for economic growth in the country. 

Harry jonson

Impact On Hotel Industry Due To VAT In Dubai

4 min read

The Gulf Cooperation Council (GCC) has introduced VAT in Dubai from the very beginning of the year 2018 and since then, it has largely influenced the hotel industry in that region. As stated by the UAE Ministry of Finance, the VAT rate is 5% on the hospitality and leisure sector. Although it been month since the commencement of Value Added Tax service, it is still challenging for the entrepreneurs to determine the VAT treatment.

Challenges regarding Place and Time of supply!

Nowadays, technological advancement support tourists to reserve hotels, rooms, tours and packages over online. This, in reality, helps the H&L industry to evolve radically. However, it has made the task of identifying the exact service location and subsequent VAT treatment more complex. Alongside this, payment through net banking or credit/debit cards makes it more difficult for the traders to figure out the exact time of supplied services and the relevant tax determination. Calculation of VAT refund in response to this tax system is equivalently challenging for the businessperson.

Have a look at the confronts in ascertaining the VAT treatment –

*      Arrangement with tour operators: Since the introduction of Value Added Tax system, determining the correct VAT treatment on the transactions concerning to an agent is quite challenging. Usually, relationship between the customer and the travel agent largely influences the VAT treatment of these arrangements. The tax slab rate varies depending on whether the agent is intermediary or principal.

 

*     Pre-booking arrangements:

 

Often tourists prefer pre-booking arrangements in order to avoid unfavorable circumstances, later. However, this hardens the responsibility of travel agents, as they need to identify whether the deposits are “payment in advance” or it is “a security deposit”. If the deposited amount concerns to security purpose, the operators need to refund the amount at the end of the tour. Determining and calculating all these transactions is indeed a tough duty for the agents.

 

*     Cancellations and refunds:

 

In Hotel industry, it is a common scenario when the tourists cancel bookings or they do not turn up and demands for a refund. In these cases, the hoteliers charge a certain fee regarding the cancellations but, what does they offer in return! Well, there comes the challenge, as even a single dispute with the guests can generate a crucial situation for the hotel entrepreneurs.

 

*     Complementary ad hoc supplies:

 

For every agent, it is essential to maintain some ad hoc supplies in order to strengthen the relationships with the guests. The facilities include currency exchange, compensatory payments, recharge of telephone calls, and so on. However, services imply there is a VAT treatment and calculating the taxable amount on those services appears to be an extra burden for the tour operators.

 

*      Tour Packages: In general, the tour packages as offered by the foreign tour operators are the combination of several components viz. tour guiding, accommodation, transport, tour brokerage and so on. Thus, the travel agents need to determine the exact VAT treatment depending on all those components of each transaction. Even a minute faulty calculation can sour a good relationship between the tour operators and the customers.

 

*     Tips and service charges:

 

In the H&L industry, it is a common practice to charge an extra amount from the guests that gets divided among the workers as an incentive policy. These voluntary tips from the guests appear to be a token of appreciation for the rendered services. Well, this service charge does not subject to VAT treatment.

 

*     Accommodation policies:

 

In UAE, hotels usually offer 30 days short-term accommodation and 6-months long-term accommodation. In most jurisdictions, the long-term accommodations are exempted from VAT treatment whereas the short-term stays are taxable. This implies that the VAT incurred on general overheads and common costs are not fully claimable and needs to be apportioned.

Well, all this highlights the fact that VAT UAE is yet not a comfortable topic of discussion. Thus, every entrepreneur is up for a consultant and needless to say, it is obviously a wise decision.

Summary

Since the introduction of VAT in UAE, hotel industry has faced many challenges. Determining the exact VAT treatment has become a different chore in all.