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Hospitality and Leisure

The Hospitality and Leisure industry has a remarkable contribution to the UAE’s economy and Gross Domestic Product (GDP) and with the coming Expo 2020 is likely to make a significant contribution. VAT introduction will have implications to businesses in this sector, to maximize their recoverable VAT and manage costs of compliance.

Here are some of the FAQs related to Hospitality and Leisure Industry:

 

Who are classified as Hospitality and Leisure?

The Hospitality and Leisure Industry is engaging on services and products that are providing rest or relaxation that includes entertainment, recreation, sports, tourism, event planning etc.

At TaxWorx, we have assessed all these factors to provide a total solution from invoice, transactional VAT treatment to real time VAT reporting to manage your VAT compliance to the FTA requirements. 

Import

As a VAT registered business, you are responsible to pay for the VAT (Input tax) from your imported Goods and Services, but you can redeem it in full through reverse charge.

Export

VAT (Output tax) is Zero rated when you export your Goods and Services outside the UAE. However, if the bill to address for your exported services is a UAE VAT registered business, you may charge 5% VAT.

Domestic

VAT is applicable when purchasing and selling taxable goods and services with their respective rates.

Exemption

If you purchased VAT exempt Goods and Services, VAT (Output tax) is not applicable.

Partial Exemption

If you purchased supplies for your business operations FTA will provide a fair computation for partial exemption; and purchases for your business expenses can be redeemed in full.

Implications

As a Business dealing with a volume of AR & AP transactions, automation and digitisation will significantly help timely and accurate reporting with increased control on cost of compliance. Ensuring you have correctly structured invoices, manage the treatment of transactions correctly, document management & archiving and reporting model will help simplify these challenges reduce risks of noncompliance.

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