As we all know that whenever a new thing comes on the market or in the world, it affects so many people that are related to it. these people can either be affected directly or indirectly but the effects will surely be there no matter what.
We all know that recently on 1st January 2018, VAT got imposed on the people of UAE. So many people got affected by it but the thoughts of getting affected seemed like horrible to so many people.
All the businessmen, before the imposition of the VAT, thought that What will come and ruin their businesses as they will have to pay money for their businesses afterwards. this is not what happened after vat got imposed but that doesn’t mean that there were no effects caused by vat at all.
A huge impact was made by VAT in UAE on the businesses of the people. VAT actually created an impact on the businesses of the people in almost three ways. Here are those;
A number of people who run different business in Dubai will have to pay for the compliance cost. This means that they will have to upgrade the software they were using the implementation of the VAT. Now as the VAT has got implemented, people need to upgrade their old software and get the new software so that they can carry out all the current things with respect to vat and the systems brought by vat.,
Ongoing Operating Costs
All those businesses who have registered for VAT will have to make sure that they pay the cost for the government VAT collection agency
Finance and Legal Costs
Another impact created by VAT on the businesses in finance and legal costs. When the businesses will get registered according to the VAT and the rules and regulations of the VAT, so many contracts will have the need to get amended. So many amendments will be made in the contracts and this will cost the businessmen some money.
All the companies who have reached in their taxable supplies above AED 375,000, they will have to pay 5% VAT no matter what. If they get caught avoiding VAT, they will get punished seriously and might get penalized as well.
After the imposition of the VAT, It has become necessary for all the people to get registered for it (having sales up to the threshold). This will not cost them so much money and will be spent in the welfare of UAE.
Another thing that needs to be clarified here is that when the business will cross the defined threshold, it is necessary for him that the threshold gets crossed over the previous 12 months. This is also a defined rule for the businesses who need to get registered for VAT. If this is not the case with you, you do not need to get registered for VAT. If you think that you will reach the threshold in some time, you can register for it voluntarily as well. For more details about VAT Visit Registered VAT Consultants here https://farahatco.com/services/vat-consultants-in-uae/