Handling VAT (Value Added Tax) can be tricky, and many businesses unintentionally make mistakes that could lead to penalties or missed opportunities. At Forever Rich Accounting & Tax Services LLC, we’ve seen firsthand how even small VAT errors can cause big headaches for businesses here in the UAE. Below are some of the most common VAT mistakes—and how you can steer clear of them!
1. Missing the VAT Registration Deadline
A lot of businesses don’t realize that if your taxable turnover exceeds AED 375,000 per year, you’re legally required to register for VAT. Missing the deadline could land you with fines and penalties.
How to avoid it: Keep a close eye on your revenue, and if you’re nearing that threshold, talk to a tax expert or accountant ASAP to get registered before it’s too late.
2. Charging the Wrong VAT Amount
Many businesses undercharge VAT because they’re unsure about what’s taxable or which VAT rate applies. This can lead to some nasty surprises during a tax audit, along with additional liabilities and fines.
How to avoid it: Make sure your invoicing system is set up to automatically calculate the correct VAT for each transaction. Need help? We’re here at Forever Rich Accounting & Tax Services to guide you every step of the way.
3. Not Keeping Proper VAT Records
VAT compliance means keeping accurate and detailed records of every VAT-related transaction—think invoices, receipts, and documentation of VAT paid or charged. Without proper records, you could be facing errors in your VAT returns or even trouble during audits.
How to avoid it: Use a solid accounting system and make it a habit to regularly review your records. If you’re feeling overwhelmed, our team at Forever Rich can provide expert advice on how to stay organized.
4. Submitting VAT Returns Late
Late or missed VAT returns are all too common, and the penalties can add up fast. In the UAE, you typically need to file VAT returns on a quarterly basis.
How to avoid it: Set up reminders for your VAT return deadlines, or better yet, let us take care of it for you! Our tax experts at Forever Rich will ensure your returns are filed accurately and on time, every time.
5. Making Incorrect VAT Refund Claims
Yes, you can reclaim VAT on business expenses, but you have to be careful. Claiming VAT refunds on personal or non-business-related expenses, or even making incorrect claims, can get you into hot water during a tax audit.
How to avoid it: Only claim VAT refunds on eligible expenses. If you’re unsure which expenses qualify, our tax professionals at Forever Rich can help you sort it out so you’re in the clear.
At Forever Rich Accounting & Tax Services LLC, we understand that VAT compliance can be confusing. That’s why we offer expert VAT advisory and compliance services tailored to your business needs. Whether you need help with VAT registration, record-keeping, filing returns, or claiming refunds, our team of accredited tax professionals is here to support you.
Don’t let VAT mistakes cost your business—reach out to us today!
📞 +971 58 836 2589
