Business expenses and VAT in the UAE

Different businesses offer different services but some of the expenses are still the same for all the businesses. After the introduction of VAT in UAE, even though there are some benefits of vat, things have not been the same. For different expenses, different taxes are applied. All the businesses are required to keep in consideration the stuff where VAT is applied and where not. For the common expenses of the business, VAT is not to be applied as they don’t come under the category of VAT payments. This is because the recovery of VAT is blocked on some categories which include that of entertainment, transportation and employee expenses.

Entertainment expenses

If the company is providing any sort of entertainment to the employees, VAT return will not apply to it. Such expenses may include the accommodation amount, food and other stuff related to hospitality. In such cases, the companies cannot move forward to the VAT recovery because it is simply not included.

Travelling through vehicles

If a company is using any sort of motor vehicle to go anywhere for his or her personal use, he will not be supposed to recover VAT on it. A motor vehicle may include any transporting vehicle which is used to go from one place to the next by the company or its employees.

Contracts play a huge role in whole deciding whether VAT will be applied on a particular thing or not. If something has been decided right from the start, it will become the obligation of the company. This is because if a company approves of something and doesn’t provide it to the employees, the employees might take legal action against the company. That is why the companies have to keep in mind every aspect so that they may not harm the company’s reputation in any way.

If the company approves of the conveyance of the employees and then back away, the employees have the full authority to raise their voices for their rights. In such cases where the company promises something, it can ask for the VAT return in such cases for sure. All the businesses must be very well aware of what business expenses are charges to VAT and those also which are blocked. Lack of understanding may prove to be disastrous for the companies and their reputation of course. That is why it would be better if the companies consider such stuff from the start.

Legal assistants and how they can help you through VAT

The VAT registration in UAE may seem difficult for some people. For those, hiring legal assistants can be a good option. They have a detailed understanding of the rules and regulations in UAE, especially regarding VAT. This makes them a very potential option for gaining the VAT knowledge and then implementing it on the functions of the company. Some people can also hire the tax agents so that these agents may look out the function of VAT registration and implementation properly. Click here for more info.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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