he introduction of Value Added Tax (VAT) in the UAE has made tax compliance highly complex for businesses. Hiring a skilled VAT consultant can hugely ease the process and avoid costly non-compliance penalties.
This comprehensive guide will equip you with a strategic 4-step approach to hire the best VAT consultant in Dubai tailored to your specific business needs.
Step 1: Learn the VAT Registration and Compliance Requirements in the UAE
In 2018, UAE implemented a 5% VAT regime on sale of goods and services under the Federal Tax Authority (FTA).
As per VAT laws in the UAE:
Firms with annual revenues over AED 375,000 must register for VAT
Smaller firms conducting certain activities like banking, real estate etc. have mandatory VAT registration
Once registered, key compliance requirements include:
- Filing periodic VAT returns
- Paying taxes on time
- Maintaining VAT invoices and financial records
- Having documents ready for audits
Consequences of non-compliance
- Heavy penalties of up to AED 50,000
- Reputational damages
- Business disruption
Benefits of working with a VAT consultant:
Navigating compliance requirements smoothly.
Maximizing tax refunds and reclaims.
Avoiding fines through expert advisory.
Having extensive knowledge of UAE’s unique VAT structure, a consultant can capably handle all compliance aspects – registrations, returns, invoices, audits, refunds.
This makes their services invaluable for streamlined compliance.
Step 2: Determine the Scope of VAT Services Required
Familiarize yourself with all mandatory VAT requirements applicable for your business.
Next, determine the scope of specialized VAT services and support you need for end-to-end compliance management.
Typical VAT advisory services consultants provide include:
VAT Registration Formalities
- Choosing appropriate VAT registration category
- Timely submission of tax cards and certificates
Tax Return Filing Support
- Accurate VAT return preparation
- Detailed documentation of taxes collected, paid
- Ensuring full adherence to reporting standards
- Issuing valid invoices integrated with accounting software
- Maintaining proper digital records for easy retrieval
Tax Refunds and Reclaims
- Identifying expenses eligible for credits
- Filing proper refund claims forms
- Following up until payment receipt
Custom Advisory
Clarification on evolving tax laws and rulings
Guidance aligned to business model
Optimization of VAT obligations
Having a clear idea of your exact advisory requirements will help pick a consultant offering all those services.
Step 3: Vet Potential VAT Consultants Thoroughly
With many consulting firms and independent advisors in Dubai’s tax advisory market, filtering to find the best match requires rigorous vetting.
Use these criteria during evaluations:
1. Mandatory Credentials
- FTA Registration
- Certified Tax Agent (CTA) Status
- Global Tax Body Memberships e.g. CIOT, CPA Tax Academy
2. UAE VAT Experience
- Years of UAE VAT law experience
- Success rate for registrations
- Familiarity with VAT for your sector
3. Service Capabilities
- Range of offerings – registrations, returns, audits, refunds etc.
- Use of advanced accounting software
- Supporting teams of tax professionals
4. Fees and Billing
- Competitive pricing packages
- Clear fee structure – one-time, retainer, hourly
- No hidden charges
Vetting thoroughly on these parameters will help qualify the most competent VAT consultant matched to your compliance needs and budget.
Step 4: Interview Shortlisted VAT Consultants Extensively
Once you have shortlisted a few potential VAT consultants in Dubai basis rankings across the evaluation criteria, conduct comprehensive discussions before choosing one.
Key Questions to Ask:
How successfully have you registered other firms in our industry?
What accounting systems do you recommend for streamlined compliance?
What support do you provide during VAT audits and inspections?
Will senior consultants directly manage advisory for our firm?
How soon do you help clients align with changes in tax rates or laws?
What value-added services do you offer beyond mandatory compliance?
Reference Checks
To validate capabilities, speaking to existing clients and checking online reviews is highly recommended before finalizing your VAT consultant.
Choosing an expert consultant from the start will make your entire VAT compliance experience smooth, efficient and financially rewarding!
Conclusion
Finding the right VAT consultant ensures you fully comply, avoid penalties, and maximize tax refunds.
Here is a checklist summarizing the key steps:
- Learn all VAT compliance rules applicable to your business
- Decide the scope of VAT advisory support needed
- Vet consultants thoroughly on credentials, experience and billing
- Interview shortlisted firms extensively
- Take references to validate capabilities
Following this strategic 4-step approach will lead you to the ideal VAT consultant catered to your business needs!
FAQs
One-time VAT registration fees range from AED 2,000 to 5,000. Retainer services for ongoing tax compliance advisory and optimization usually range between AED 2,000 to AED 10,000+ monthly.
Key credentials are mandatory FTA registration, Certified Tax Agent (CTA) status, global tax body memberships, proven experience handling UAE VAT requirements, and familiarity with your industry.
Important questions include years of UAE VAT experience, success rate for registrations, recommended accounting software, audit support provided, whether senior consultants will manage your account, responsiveness to changes in legislation, and any value-added services offered beyond basic tax compliance.
Red flags to watch out for include lack of supporting credentials, fees substantially lower than industry averages, vague verbal promises not matching regulations, poor knowledge of technical details, reluctance to share client references, and any records of past disciplinary action.
