According to the Commission, new rules would help clamp down on
VAT fraud and improve the rules for legitimate businesses and traders.
In Revenue Memorandum Circular (RMC) 42-2003, it was ruled that input
VAT claimed for refund may be charged to appropriate expense account or asset account subject to depreciation, whichever is applicable, in case the zero-rated sales fail to comply with the invoicing requirement, e.g., including the TIN of the
VAT registered seller-claimant in the
VAT invoice or
VAT receipt it issued to its customers.
"
VAT collection in the UAE would have benefited from the great role of private consumption in the economy, resident and tourist related, and the broader
VAT base, than, say Saudi Arabia," Malik added.
"Investing in the right tax accounting software will enable businesses to account their
VAT transactions as well as triangulate their business records to generate accurate
VAT return in the prescribed format.
Businesses should all be aware of the fact that while most goods and services are standard-rated (
VAT charged at five percent), there are certain supplies that are zero-rated (
VAT charged at zero percent), certain supplies that are exempt from
VAT and others that are out of scope.
Class 3: From P51.00 (
VAT inclusive) to P52.00 (rounded off from authorized P52.01)
A refund is not available under this category if the foreign business makes supplies in the UAE, unless the recipient is obliged to account for
VAT under reverse charge mechanism.
Consumers who have an apprehension about the
VAT registration of sellers can verify the status of registration by using the
VAT number or CR number of the seller.
* The NBT continues to support consumers and investors with all aspect of the
VAT, and invites all stakeholders to take advantage of the information available online (www.nbt.gov.bh) and on NBT's social media accounts (@BahrainNBT) in addition to calling and emailing the Call Centre on 80080001 or vat@mof.gov.bh for further queries.
* The time-of-sale method allows a customer to receive
VAT exemption at the point of purchase.
Furthermore, Chua said economic managers are now also basing the government's revenue targets for the next fiscal year net of
VAT refunds.