In the UAE, you have to follow the guidelines related to VAT Administrative exceptions with the option to apply for these exceptions. The taxation authorities in the UAE want to mature towards a better taxation system at a fast pace. It has been done keeping in view the problems faced by various businesses in the country in satisfying all tax-related obligations and regulations which stipulates fines for non-compliance at any stage of the taxing system. VAT Administrative Exceptions provides the applicants with concessions by the Federal Decree-Law of 2017 related to VAT in case a particularly difficult circumstance prevents the businesses from following the prevalent taxation laws. This mechanism ensures help for not only small businesses but as well as some of the bigger business houses. So, this system provides benefits to the business community as a whole. 


There are businesses registered with FTA or Federal Tax Authority in UAE who can request exceptions through emails after properly filling Application Form. 


The following matters are covered under VAT Administrative Exceptions: 


Tax Invoice matters: It was quite challenging for the businesses to ensure display of exchange rate while making tax invoice. It has been a burdensome job for them. Keeping the records are also quite difficult and challenging due to their sheer number. Also, the display of the rate of VAT in UAE and VAT amount on each invoice together with mention of the foreign exchange rate at the time of issuance of Tax Invoice makes the business person struggle. 


Tax Credit Notes: The exceptions are allowed to the business persons regarding the mention of Tax Credit notes. They may be allowed not to mention the credit notes. In case of a large-scale transaction, the registrant should be able to provide with sufficient records of supply.

Duration of Tax Period: There impedes the workflow of the registrants and that is they have to maintain Cash-flow, they have to invest in time and cost to compile a data, time and effort needed to check on the accuracy and then the work of making the payments. This is an obstruction during the filing of monthly or quarterly return. If the span of the tax period is increased, the registrant will have sufficient time to prepare and review the returns. 


Businesses in a refund position may wish to maintain the position in a period of 12 months. It is the job of the FTA to see whether there has been any change in the business model. If there is no shift, the application for maintaining refund position may be approved by the FTA.

Even the small and medium enterprises (SME) which are registered and which receive official financing approved by the government can seek a change in the duration of Tax Period. In that case, they have to provide the details of total tax paid in the previous 12 months. 


SMEs which don’t receive any official funding approved by the government, and if the total value of taxable supplies is less than AED 5 million in the preceding 12 months, can also get an alteration in Tax Period for them.


About GCC filings


They are a chartered accountant in the UAE providing taxation, accountancy and VAT related work of the businesses operating there. They provide VAT and TAX consultancy in UAE towards the expansion of your business keeping in view the tax liability, procedural compliances, calculation of investment in new plants and machinery, etc. 

Leave a Reply

Your email address will not be published. Required fields are marked *