In: Accounting
Value-Added Taxes (VAT) was introduced in the United Arab Emirates (UAE) on 1st January 2018. VAT will provide the UAE with new source of income which will be continued to be utilized to provide high-quality public services. VAT will also help the government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.
REQUIRED:
a) Briefly describe VAT.
b) State three (3) responsibilities of VAT-registered business in implementing VAT.
c) A VAT Return summanzed the taxable person's VAT liability. Briefly explain what is VAT Liability.
d) The tax law has laid out certain goods and services that are entitled to zero-rated. Briefly rated principles. Provide two examples of business sectors that may describe the zero- subject to zero-rated supplies.
a) Brief discription of VAT in UAE
Value added tax or VAT is a tax on the consumption or use of goods are services levied at each point of sale. VAT is a form of indirect tax and is levied in more than 180 countries around the world.The end consumer ultimately bears the cost. Businesses collect and account for the tax of behalf of the government
b) Responsibility of VAT registered businesses in implementing VAT
VAT registered business generally
1. Must charge VAT on taxable goods or services they supply.
2. May reclaim any VAT they have paid on business related goods or services
3. Keep a range of business records which will allow the government's to check that they have got things right.
c) Yes,vat return will summarize the taxable persons liability.
Meaning of VAT liability is amount payable by the registered businesses to govt at the end of the period after setting off the input tax credit available for him on purchase of goods or services.
d)VAT will be charged at 0% in respect of the following main categories of supplies