Please note the VAT Returns form I had posted above, it has all the details of how the tax return report should be.
As @Brucanna mentioned, the reporting for state wise tax is only for revenue sharing purposes, but the tax remittance is not state wise it is central and zero rated supplies has to be one complete sales figure. In the images I posted, for Outputs (VAT Collections) Standard rated supplies or 5% supplies need to be seperated in rows (1a - 1g for 7 different states), but Zero rated supplies need to given as a total value in row 3.
Reverse charged VAT will not be paid, but the amount has to be accounted for and calculated and shown in both Input and Output calculations, row 2 and row 10.
Sorry just reattaching the relevant screenshots here again for reference.
In effect, the Reverse Charge Vat is also a 0% but needs to have a separate tax code so that the gross values of any related transactions can be captured within the tax reports so that the user can then calculate the related VAT values which end up being both a plus and minus.
I missed the bit about per-emirate VAT only being for revenue sharing. But regardless, it still seems the reports will make the most sense if per-emirate tax codes are used for both. The reports can be summed to determine the centralized remittance requirements.
As for the 0% code(s), I realize there will be no tax effect. My cautionary comment was intended to draw your attention to the fact that if you use a single VAT 0% rate, you will not be able to report 0% transactions by emirate. As long as there is not now or in the future a need to do so, a single 0% rate would suffice. But it is easy for me to imagine a tax authority wanting information about zero-rated sales. Otherwise, how will they know how much revenue they are missing and be able to justify changing the applicability of 0% taxation?
Why would they make more sense, to whom?. If the information is not required by the authorities why unnecessarily create it, plus, why create a manual summation process which could lead to calculation errors.
But the Tax Authority is getting the information about zero-rated sales at item 3 of the return.
Because various tax reports in the program will show offsets properly by emirate. Maybe not essential, but probably easier to understand than a lone VAT code that shows up on purchases only in a regime that is adopting a an offsetting VAT scheme for the first time. It also makes the tax processing steps different for UAE users than for anyone else using a Manager in-built tax code. And who knows what problems that might produce in the future with program changes, especially improved tax reporting?
Yes, but only at the composite level. Iām looking ahead to when lower level authorities want to fine-tune the system. That might not happen, but history suggests all tax authorities want ever-increasing detail, so one might as well plan for it.
Thanks. Also great thanks for leaving in the VAT 5% and VAT 0% codes, will
use them for purchasea and import exports, for statewise sales we could use
the statewise codes.
Would you be kind enough to guide me if possible on how to record a import customs VAT charge that is not invoiced by the supplier but is recorded by the customs authority so that manager recognizes the amount.
