The dynamic landscape of business operations in the United Arab Emirates (UAE), entrepreneurs often find themselves juggling various financial responsibilities, including Value Added Tax (VAT) filings. For businesses seeking financial assistance through loans, a crucial aspect often considered by lenders is the VAT filing history. All individuals registered for VAT, regardless of the nature of sales, purchases, taxes, VAT registration, etc., must file a VAT return.
Besides various services, Dhanguard assists individuals and businesses with filing VAT returns in the UAE. In this post, we delve into the significance of VAT filing for at least 2 quarters in the UAE concerning business loans, illuminating its implications, processes, and deadlines.
Introduced in 2018, VAT is a consumption tax levied on the value added to goods and services at each stage of production or distribution. In the UAE, businesses registered for VAT are required to file periodic returns, typically every quarter.
These returns summarize the VAT collected from customers and paid on purchases, ultimately determining the VAT liability or refund. The official tax report that a registered business must send to the Federal Tax Authority before the deadline.
The UAE tax authorities mandate specific deadlines for VAT return filings. Generally, businesses are required to submit their VAT returns and make payments within 28 days from the end of the tax period. For quarterly filings, this typically means the due date falls on the 28th day of the month following the end of each quarter. Adhering to these deadlines is crucial to avoid penalties and maintain compliance with tax regulations.
Key considerations:
If a payment is due, it must reach the FTA by the same date.
The deadline is extended to the following business day if it falls on a weekend or a national holiday.
For a Taxable Person, the standard tax period is three calendar months.
When assessing a business's eligibility for a loan, lenders often examine the VAT filing history. Filing VAT returns for at least 2 quarters demonstrates financial stability and adherence to regulatory requirements. This consistency reflects positively on the business's financial health and reliability, instilling confidence in lenders regarding loan repayment capabilities.
The importance of VAT filing for At Least 2 Quarters is:
Consistent VAT filings indicate that the business is generating revenue and managing its finances effectively, signalling stability to potential lenders.
Adherence to VAT filing obligations showcases the business's commitment to regulatory compliance, fostering trust and credibility with lenders.
Lenders view businesses with a track record of VAT filings as lower risk, as it implies a structured approach to financial management and reduces the likelihood of default on loan repayments.
A positive VAT filing history can influence loan approval decisions and impact the terms offered by lenders. Businesses with a strong filing record may qualify for lower interest rates or higher loan amounts.
The process of VAT filing for At Least 2 Quarters is:
Gather Financial Data: Dhanguard will assist in collecting all relevant financial records, including sales invoices, purchase invoices, and VAT receipts, for the applicable quarters.
Prepare VAT Returns: We will help to accurately prepare VAT returns for each quarter, ensuring compliance with UAE tax regulations.
Submission and Payment: We will assist in filing of returns electronically through the Federal Tax Authority (FTA) portal within the stipulated deadlines. Ensure timely payment of any VAT liabilities to avoid penalties.
The process of filing VAT returns for at least 2 quarters in the UAE can be streamlined through online platforms provided by the FTA. Businesses can register on the FTA portal, where they can access VAT-related services, submit returns, make payments, and track compliance status conveniently.
While the process may seem complex, with Dhanguard's expert team by your side, you can rest assured. Our specialists will efficiently manage all aspects of the process, alleviating any concerns you may have.
VAT filing for at least 2 quarters in the UAE plays a pivotal role in securing business loans, influencing lender decisions, and shaping loan terms. Demonstrating consistency in VAT compliance not only enhances financial credibility but also reduces risk and fosters trust with lenders. By understanding the significance of VAT filings and adhering to regulatory requirements, businesses can strengthen their financial standing and access the necessary funding to support growth and expansion.
Dhanguard is here to help you at every stage whether you need help with VAT registration compliance or are looking for a VAT refund in Dubai. Get in touch with us right now to find out how we can improve your company's financial performance in the UAE and simplify your VAT responsibilities.
