What are some of the benefits of registering for VAT voluntarily?
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As it’s widely known, there are numerous benefits of VAT implementation in the UAE. It opens up different streams of revenue for the country and reduces dependence on oil-based resources. Businesses with an annual turnover of AED 375,000 must register for VAT. Businesses with annual turnover of less than AED 375,000 but more than AED 187,500 can choose voluntary registration. As registered tax agents, we believe businesses should opt for voluntary registration to avail the benefits that come with it. Let’s look at some of them.
1. Easy to do business
Most organizations now prefer dealing with companies that are VAT registered and can produce tax invoices so they can comply with the record-keeping requirements of the Federal Tax Authority. Business dealings become easy if you are registered for VAT and can streamline your reporting. Hence, voluntary registration helps in securing deals and partnerships with other VAT registered companies. Moreover, it also gives the image of being more professional to other businesses.
2. Updated records
To comply with VAT laws, companies must have proper and updated accounting records. Most businesses fear that taking help of an expert may be expensive. However, that’s far from the truth. We help our clients set up for VAT and manage all their tax-related workload at an affordable price. It’s wiser to opt for VAT experts to assist your business in order to avoid the chances of penalties.
3. No worry of reaching the threshold
While you’re busy running your business, you may not notice when you would have reached the mandatory threshold. If you’re not registered before that, you may have to pay hefty penalties. Voluntary registration saves you from constant worry and fines that could pile up if you don’t keep track of meeting the mandatory threshold.
Whether you opt for voluntary or mandatory registration, you will be able to get VAT refunds. This is especially useful when you spend a lot on purchasing goods for your business. Being registered for tax will let you claim VAT on them. Don’t forget to keep all the records and invoices.
5. Accounting systems
To have updated accounting records, you will need to upgrade your business to a good accounting solution that provides you with all the VAT services along with automating bookkeeping for you. This may seem like a hassle for small businesses, but if you partner with solution providers like McLedger, you will not have to handle any work that comes with record-keeping. Along with streamlining your business accounting and getting it started for VAT, we give you VAT invoicing software and cloud storage to keep your data secured.
6. Learning new skills
Although small businesses and startups may experience the worry regarding tax, there’s benefit in it for them. By becoming a taxable person, you and your team members will gain the knowledge and skills that will help you be ready for compliance. If your business is on the road to meeting the VAT threshold or you want to voluntarily register for VAT, you can avail of a free consultation from us along with receiving a free trial of our cloud accounting application. With experience in all major industries, we can assist your business during the tax season so you don’t have to face any troubles. To know more about our services, get in touch with us.