Advantages of VAT registered company

 At first glance, most of companies will not want to register due to the additional costs and compliance activities associated with obtaining a VAT registration UAE. However, it is important to recognize the immeasurable benefits of these companies becoming registered dealers for VAT purposes. In this article, let's understand the benefits of registering for VAT. Vat consultants in Dubai will provide you all knowledge about VAT registration.

Collect taxes paid at the time of purchase

An important advantage of registering under Dubai vat is that companies can recover VAT paid for purchases or costs incurred in their business.

The provision to collect taxes paid at the time of purchase allows companies to transfer VAT credits and avoid double taxation in the supply chain. This is an important factor when other companies decide to supply or purchase from their own. If any company in the supply chain is an unregistered distributor, the price of the product will rise, resulting in higher prices for the end consumer than the supply chain consisting of registered distributors. Therefore, being registered for vat is necessary to ensure that the registered company deals with them. vat calculator is used to calculate the vat to be paid by the company.

Issue a tax invoice

Only registered companies can issue tax invoices for the created supplies. Registered companies can only collect temporary sales tax on purchases from registered companies and only if a temporary invoice is attached. Therefore, registered companies will always prefer to purchase from registered companies to ensure that the input tax on such supplies can be recovered. In such cases, obtaining VAT registration is essential to enable registered companies to continue to purchase VAT.

VAT refund paid for the zero-rated supply

Supplies such as exports of goods, exports of services, the supply of investment metals, etc. They are reported as zero-rate supply. Registered companies that manufacture such supplies are eligible for a VAT refund paid for the purchases used to manufacture the zero-rate supplies. Therefore, companies with zero tax rates can benefit from obtaining VAT registration. VAT registration allows you to receive a refund of the VAT paid at the time of purchase, reducing the cost of making such a supply.

Give your business credibility

VAT registration gives your business credibility. It gives the impression that the company has been established and has an identity. This is very helpful for SMEs to grow their business and serve new customers.

Avoid the penalty of not registering

Small businesses should always be aware when sales exceed registration limits. If the company's trading volume exceeds the limit of 375,000 riyals and the company is not registered, you will have to pay a heavy penalty if you do not register. In contrast, companies with VAT registration Dubai do not have to worry about exceeding the penalties associated with threshold limits.

Therefore, it is recommended that SMEs evaluate the many benefits of obtaining a VAT registration and decide whether to register informally. While obtaining VAT registration comes with additional compliance costs and requires you to maintain accurate records and submit returns regularly, the benefits of registration are immeasurable.