For the understanding of anything, you at first, need to know all the terms that are related to it. This is very necessary for gaining the knowledge of that particular thing. Just like all other things, gaining the lodge regarding the terms of your taxation system is equally important. this will help you in gaining an insight regarding all the things that are directly or indirectly related to the taxation system.
Here are some of the key terms that you must know regarding VAT in UAE;
A person who is registered or needs to register according to the law for the sake of paying the taxes, such a person is referred to as a taxable person.
It is to be noted here that only a taxable person is the one who can collect and remit to the government
Tax Registration Number
There should always be a thing to distinguish you from others. The tax registration number basically helps you in getting an identification. It is allotted to the people by the government after the person registers for the VAT. There are many registered tax agent or vat consultants will help you in vat registration, vat return filling process. Click here to read how Farahat & co. explain all about vat.
Output tax is basically the tax that is collected on the sales of all the goods and services provided by the businessmen.
Input tax is considered to be the tax that is paid on the purchase of all the goods and services
Input Tax Credit Adjustment
Not so many people would be aware of it but there is a system in which you can adjust the input taxes with the output taxes. such a system is referred to as Input Tax Credit Adjustment.
There is a particular period for the taxable person so that he can calculate all the payable tax. A statement needs to be prepared by the businessman or the taxable person. In that statement, he is ought to enter all the details that are relevant. After preparing the statement, he must submit it to the government. the tax periods can actually be monthly, quarterly or annually as well.
VAT Return Filling
For the purpose of the VAT period, a statement needs to be prepared by the taxable person. This statement will basically contain all the details including the details of the sales, purchases, input, output and the tax payable of the company as well.
People need to have a particular idea about all the terms that are used in the world of the VAT. This will help the people in getting a better understanding of all the things. If they do not know about the basic terms, they will not be able to understand the things from the root level. This is very necessary for the people of UAE because they have been introduced to the VAT in UAE the near past. So, they need a better understanding of the things or else their confusions will not get cleared.
The above mentioned were the frequently used terms in VAT and you will listen to them every now and then whenever you come across anything that is related to the VAT.