10 Most Common VAT-Related Mistakes that UAE Businesses Should Avoid


Ever since the introduction of VAT in the UAE – there have been questions and some more. With regulated tax agents in the UAE – businesses are trying to sort their VAT-related issues, given the heavy penalties charged on non-compliance. Here are a couple of common mistakes that businesses tend to make and must always avoid.

  • It’s important to record the sale in the correct emirate – it isn’t dependent on the customer location but on the location of your fixed business.
  • Most businesses fail to notify the FTA that tax is based on margins, wherein if you are selling certain goods like coins, stamps, and second-hand goods – you must charge VAT on the profit margin.
  • Not having an invoice-wise working of the returns – it’s important to maintain this, because if ever the FTA demands an audit – these details will be required.
  • It’s crucial to file returns and make payments on time, or else there is a heavy penalty levied on the business. Given that most businesses tend to miss out on dates, it’s important to indulge in VAT consultancy services in Abu Dhabi and Dubai.
  • Be careful of the claims – and ensure you are making the right claims and on the right purchases.
  • If your business makes a zero-rated sale or an exempt sale – it doesn’t mean that you don’t show it. Even if you file everything properly and miss out on this information – it can have repercussions. Identify and disclose them in your return submission.
  • Reverse Charging Mechanisms is another place where businesses need to be careful. While disclosing transactions for returns, companies fail to disclose the reverse charging mechanisms, given they don’t have any tax effect.
  • Timing is crucial when it comes to VAT, and it should be charged at the right time. There have been instances where businesses fail to insert supplies in the wrong returns, although they are supplied much later.

These are a few of the common VAT-related mistakes that businesses make. However, if you want to avoid this, it’s good to indulge in VAT health check services in UAE and stay in compliance with the VAT laws. To know more, reach out to TRC Pamco, a leading VAT consultancy in Abu Dhabi and Dubai.

All You Should Know About Free Zone company Setup in Dubai

All You Should Know About Free Zone company Setup in Dubai

UAE is one of the global leaders in business and trade – and if you want to capitalize on this market – setting up a free zone company in Dubai is a must! If you register your company in a free zone, you can organize international business and leverage the commercial advantages granted by the UAE legislation.

A free zone company in the UAE gives you 100% business ownership, 0% taxes, flexible office solutions, and the possibility to own a physical space inside the free zone.

The two most common legal entities within the free zone include Free Zone LLC and Free Zone Establishment, however, these two aren’t available in all the free zones so before you register the company, understand the requirements for each of the free zones and then select one.

Once you have finalized the free zone and your trade name, you need to apply for the trading license within the free zone. Depending on your business activities, free zone company setup professionals in Dubai can help you apply for the license, whether you want it for advertising, music production, trading, manufacturing, or e-commerce business.

An office address is a must, be it physical or virtual – so get that going, while also getting pre-approvals, registering your business, and obtaining the license.

How can you set up a free zone company? Well, firstly, consult a professional, and reap the benefits of their knowledge. A free zone setup service in Dubai will help you save up on time and resources by doing the work for you while ensuring you are always compliant with the law, and when a problem shows up – with their experience, they will provide you with customized solutions.

If you’re looking for freezone audit services in Dubai Airport Free Zone, Jebel Ali Free Zone, DMCC Free Zone, or any other free zone audits, reach out to the team at TRC Pamco, a renowned tax firm in Dubai, and they will help you get 100% foreign ownership through efficient company formation services.

How to do VAT Health Check?

A VAT health check is super essential for every business, to ensure authenticity and compliance of organizational processes, under the VAT guidelines – and thus successfully submit accurate numbers for VAT returns.

A VAT health check assures the organization of fair treatment on VAT, given the transparent audit trials and reconciled accounts. A health check begins after discussing the business, identifying the areas that need focus, and reviewing the VAT workings and systems being used. In the UAE, the Federal Tax Authorities are authorized to perform tax audits – thus it’s important for every business to be VAT compliant, to ensure no penalties on your business.

How is a VAT health check conducted?

A VAT health check is conducted by first independently reviewing the client’s tax filings to get a true and fair view of their business. Post this, if there are any questions, it’s put forward to the clients. After gathering all the past and present information, a thorough study is undertaken on the accounting records, the calculations, the tax liabilities, tax compliance, and tax records. Annual VAT returns are compared with the accounts, to ensure they provide the same numbers. It’s all about knowing if VAT is fairly treated by an organization and reports accurate information to the FTA.

A VAT health check is a must for every business. But why? A VAT health check conducted by qualified VAT firms in the UAE helps you:

  • Identify opportunities to maximize your VAT returns
  • Highlights all areas of concern, helping you mitigate risk in the most efficient manner
  • Reviews your VAT liability, helping you optimize it.
  • Identify if the maximum VAT benefit is being achieved by your business
  • Constantly reviews your VAT systems to identify arising opportunities or improvements
  • Find errors or gaps before the FTA, thus potentially mitigating any penalties or defaults

If you are finding any discrepancies in your business, and looking for a VAT health check, reach out to TRC Pamco, a VAT consultancy in the UAE. They provide Health check services with their vast experience and knowledge on the subject matter.