Tally For UAE, Office 202, Al Shoala Building, Deira (2026)

26/09/2019

UAE's Federal Tax Authority issues warning over VAT scam

The UAE’s Federal Tax Authority on Tuesday issued a warning after reports of scammers trying to target bank customers over VAT refunds.

In response to reports that some bank customers have received emails from unidentified sources impersonating banks and financial institutions requesting personal data in the promise of helping them claim VAT refunds, the FTA reaffirmed that they can only be processed through its official website.

The authority said that some recipients have been asked to provide personal data, including names, credit card numbers, and PIN codes, claiming that providing the information will allow them to recover VAT.

“Refunding taxes for legally eligible applicants is a direct transaction between the registered business and the FTA, and does not call for any intermediaries,” it said in a statement.

“The process is completed via advanced electronic systems, available on the FTA’s official website, which includes security features for financial transactions. It is done through official channels using the International Bank Account Number (IBAN), and via systems under the authority of – and electronically linked to – the UAE Central Bank.”

The FTA warned all registered businesses, calling on them to remain vigilant and maintain the confidentiality of their personal data.

26/09/2019

UAE FTA publishes Cabinet Decision No. 55 of 2019

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published Cabinet Decision No. 55 of 2019 (the Decision) on the Excise Price for to***co products.

Who is this alert for?

Businesses who are required to calculate and pay Excise Tax on To***co Products in the UAE.

Overview

The Decision sets out the Excise Price for To***co Products as follows:

No less than AED 0.40 per cigarette; and
No less than AED 0.10 per 1 gram of water pipe to***co, or ready to use to***co or other similar products.
It also provides the following definitions:

Ci******es – all normal and electrically-heated ci******es.
Water pipe to***co – to***co intended for smoking in a water pipe and which consists of a mixture of to***co and glycerol, whether or not containing aromatic oils or extracts, molasses or sugar and whether or not flavoured with fruit.
As per Article 13 of the recently published Cabinet Decision No. 52 of 2019, the Excise Price used in calculating Excise Tax payable shall be the higher of:

The price published by the FTA for the Excise Good in a standard price list (if available); or
The designated retail sales price for the Excise Good, less the Tax included therein.

The Decision therefore sets the minimum Excise Price for the To***co Products listed. Where the designated retail sales price less the Tax included is lower, the Excise Price published in the Decision will apply.

The Decision indicates that the changes will come into effect before 1 January 2020, on a date to be specified in a future Decision issued by the Minister of Finance.

26/09/2019

UAE VAT refund for foreign businesses
Deadline approaching

The deadline for non-resident businesses to submit requests for Value Added Tax (VAT) refunds in the United Arab Emirates (UAE) is fast approaching.

Applications must be submitted by 1 October 2019 to the UAE Federal Tax Authority (FTA) to recover VAT incurred during the 2018 calendar year. Foreign businesses should assess whether they qualify for a refund and start calculating the amount of UAE VAT they can reclaim.

This scheme is open to businesses which meet the following criteria:

No place of establishment or fixed establishment in the UAE;
Not a taxable person in the UAE;
Not carrying on a business in the UAE; and
Carrying on a business and registered for VAT (or equivalent) overseas.
Businesses in the following countries are eligible:

Austria
Bahrain
Belgium
Denmark
Finland
France
Kuwait
Iceland
Isle of Man
Lebanon - in certain circumstances
Luxembourg
Namibia - refunds only available for business goods that are exported and not for services consumed in the UAE.
Netherlands
New Zealand
Norway
Oman
Qatar
Saudi Arabia
South Africa - refunds only available for expenses relating to goods that are exported from a designated UAE port within 90 days and does not apply to services.
Sweden
UK
Zimbabwe
Switzerland

20/08/2018

EID Nubarak to All

05/08/2018

New FTA clarification distinguishes entertainment expenses for employees and non-employees.

Companies in the UAE will not be able to recover value-added tax (VAT) paid on entertainment expenses for non-employees, according to a new clarification issued by the Federal Tax Authority (FTA).

Thomas Vanhee, partner at Aurifer Middle East Tax, said VAT on entertainment expenses provided to non-employees, such as accommodation, food and drinks not provided during a meeting and access to shows or events, or trips provided for the purpose of pleasure or entertainment, is not recoverable.

The new clarification distinguishes entertainment expenses for employees and non-employees, he added.

"This very strict and conservative position disallows pharmaceutical companies inviting their buyers to a conference in a hotel to deduct input VAT; [plus] a dealer holding a launch party for a new car model will also be prevented from recovering the input VAT on the food, drinks, band, etc., although it is clearly done with the objective of increasing sales. It is, however, allowed to provide potential customers with gifts - although these could constitute deemed supplies for which VAT is due," Vanhee said.

The UAE and Saudi Arabia implemented 5 per cent VAT on a number of goods and services - including entertainment - from January 1, 2018.

However, VAT on employee expenses is recoverable if there is a legal, contractual obligation or documented policy, explains the FTA clarification.

Vanhee explained that the hotel stay paid to a new joiner before s/he finds his/her own home is a recoverable expense. However, the lunch or dinner for employees (e.g. Iftar) is not.

According to the FTA's clarification, a gala dinner where food and refreshments are considered to be so substantial that they constitute an end in themselves will be considered as an entertainment expense.

For staff parties, no VAT is recoverable, neither for service awards, retirement gifts, Eid gifts, etc.

"Businesses will have to review their expense policies as a result of the publication of this clarification. Especially documenting certain employee expenses will allow them to still recover input VAT," Vanhee concluded.

05/08/2018

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28/07/2018

The UAE introduce the New VAT Rules. The rule will apply to any used Pre-Owned Items such as household items, furniture, automobiles, and electronics. Recently the FTA (Federal Tax Authority) announce the news of five percent on the sale and purchase of a used product such as cars and furniture etc.

Anurag Chaturvedi, managing partner, Chartered House said “That product purchased Before on 1st Jan 2018, the customer will have to pay the VAT on full-price but if the product has bought in this year so then the seller can claim VAT only on the profit margin and not on the entire value of the pre-owned product.

Chaturvedi said with an example that is a car dealer bought a car in Dh50,000 in last year. After he sells it in 2018, so the VAT amount on full price, it means the VAT on the entire Dh50,000 amount. But if that car dealer bought the car for Dh50,000 this year from a seller who purchased it after paying VAT and when he sells to a buyer for Dh60,000, so it only pays the VAT only for margin, not the full price.

26/05/2018

Cabinet approves resolution on VAT refunds for UAE exhibitions, conferences

The Cabinet has approved a resolution pertaining to Value Added Tax (VAT) on conferences and exhibitions, in line with the government's ongoing efforts to support this sector and to enhance the country's status as a hub for meetings, incentives, conferences and exhibitions (MICE).

The resolution provides for granting the facilities involved in organising exhibitions and conferences the right to refund the amounts levied on providing such services, to guarantee ease of doing business and competitiveness in this sector. It supports, at the same time, the efficient implementation of the tax system, as per the best integrational practices.

The resolution aims to support the UAE's MICE sector and to maintain the country's global lead in this field, in the light of the facilities offered to develop the sector and the keenness to provide the conducive environment, infrastructure and legislative framework for doing business and to attract the world's leading event oragnising companies.

According to recent statistics, MICE's annual contribution to UAE economy stood at Dh2.39 billion and is anticipated to grow to Dh5.1 billion by 2020.

According to the resolution, any exhibition authorised by the competent local authority that is held for seven days or less, or any meeting between people sharing the same interest and authorised by the competent local authority for seven days or less, shall be eligible for refund of the VAT value, provided that the service recipient has no established base or a permanent facility in the UAE.

The resolution also stipulates that the service recipient must not be registered, or obliged to be registered in the UAE, nor did he pay any tax to the supplier.

26/05/2018

Firms, individuals have to use exchange rates on the date of supply for VAT

All those UAE companies and individuals who raise tax invoices in a currency other than the UAE dirham will have to use the exchange rates approved by the Central Bank as on the date of supply.

Pratik Shah, Partner, WTS Dhruva Consultants, said apart from mentioning the foreign currency, the tax invoice should also mention the gross amount and VAT amount in UAE dirham along with the exchange rate applied.

He noted that businesses, which import concerned services from outside the UAE, are required to account VAT under reverse charge mechanism on the invoice amount in foreign currency into UAE dirham as per applicable exchange rate.

"In this regard, the Central Bank of the UAE has recently made available facility to access exchange rates against UAE dirham for VAT related obligations in its website. With this, businesses need to ensure that due VAT has been accounted as per the applicable exchange rate notified by the Central Bank are followed. In the event of failure to comply with the aforesaid, it may entail penal consequences related to maintenance of required records as per the Tax Law, failure to account due tax on imports etc.," Shah added.

The currency exchange rates are updated Monday to Friday and are based on forex rates prevailing at 6pm UAE time each day. In instances where specific markets are closed due to local holiday, then the relevant rate will be the prevailing rate of the previous day at 6pm. All rates used are the mid rates of the concerned currency pairs, the apex bank said.

21/04/2018

UAE achieves '98.8 per cent VAT compliance': Federal Tax Authority

Nearly 100 per cent of companies in the UAE that were obliged to pay value added tax (VAT) have since registered to do so, according to Khalid Al Bustani, director general of the Federal Tax Authority (FTA).
In remarks to the media on the anniversary of the first 100 days of VAT in the UAE, the senior official also said he suspected a number of companies failing to register, either deliberately or accidentally.

"We will not tolerate tax evaders, and we will not tolerate tax avoiders,” Al Bustani said sharply.
All you need to know about VAT in UAE
Despite this, he said that the FTA had attained a good level of compliance.
”We have achieved 98.8 per cent compliance," Al Bustani told the gathered media on Wednesday morning.

"Even though the UAE is new to the tax system, achieving that level of compliance reflects how advanced the UAE is. They were ready for the implementation of VAT," he added.
Al Bustani also pointed to the success of the self-declaration system, which encouraged private sector companies to submit tax returns on a self-declared basis.
The five per cent tax was implemented on January 1, 2018, as part of the government’s strategy to diversify its revenues.
"VAT came after comprehensive studies from the UAE. The results of studies showed that a new tax will support economic development," Al Bustani said.
According to the FTA, around 275,000 companies have registered to date, with 2,160 applications pending. Al Bustani said he was pleased by this number, given that the project is only 100 days old.
They say that around 14,402 firms were forced to resubmit their applications.
"We are under discussion with these companies, who needed to re-apply due to missing information, or information not submitted correctly, before they can be approved by the FTA," Al Bustani said.
Meanwhile, the FTA said that it suspected a number of companies of not registering.
"We believe there are a large number of companies who have not registered yet,” the senior official said, adding that some of these may be intentional.
“We want to pass the message on: It’s an obligation to register, and they are violating the law if they don’t,” he said.
The FTA has postponed the penalty for not registering until the end of April to give companies more time to prepare their business, but it said on Wednesday that this did not mean these companies were exempt from registering.
“They are obliged to register, and pay VAT amounts since January,” Al Bustani said bluntly.
“We will need to take action against them, and violate them. Those who have not registered are tax evaders. We will take necessary actions,” he said.
To combat this, the FTA says that it has planned a roadshow with the Department of Economic Development (DED) to send its analysts to these unregistered companies to “help them register, if they are having technical issues.”

03/04/2018

Tally Solutions, a leading international accounting and compliance software provider, has received the Federal Tax Authority (FTA) Accreditation in the UAE, recognising its commitment to safer, more efficient and faster Value-Added Tax (VAT) operations.

“It’s a privilege to receive this accreditation and be recognised by the FTA for our strong compliance culture. While the accreditation is a reflection of our dedication to excellence, it gives our customers the added advantage to trust our high quality international standards. As pioneers of accounting and compliance softwares, Tally has always been committed to excellence, and the accreditation is a step further in our efforts to raise standards within our business and the industry,” said Vikas Panchal, Business Head at Tally Solution in the Middle East.

Tally Solutions, is a leading international accounting and compliance software provider which has recently introduced Value Added Tax (VAT) software - Tally.ERP 9 Release 6.4 to help businesses comply with VAT procedures. Trusted by more than 1.2 million businesses globally, Tally Solutions already includes a list of 50,000 satisfied clients across GCC.
“The FTA accreditation was awarded to us after a vigorous audit to ensure our automated solutions are above and beyond customer requirements. It is an extremely robust and complete measure of an organisation’s approach towards compliant, safe and efficient automated solutions. Achieving this accreditation reconfirms our quality processes, procedures and policies,” added Vikas Panchal.

Awarded by the Federal Tax Authority (FTA), the accreditation recognises tax agents and tax accounting software vendors through a rigorous process to provide UAE-based businesses necessary technical support and implement a tax system that adheres to international best practices. It allows taxable persons to fully meet their tax obligations, while saving them time and effort, and reducing the margin of error in calculating Tax.
During the last 30 years, Tally Solutions has become an expert in enabling compliance for businesses in different (VAT and GST) and complex tax environments such as in India. Tally is one of the first to launch a VAT compliant software for the UAE and Saudi Arabia in December 2017. The company has also been awarded an accreditation by The General Authority of Zakat & Tax (GAZT) in Saudi Arabia.

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