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The retailing sector represents a large part of the UAE economy and is projected to expand at a compound annual growth rate (CAGR) 4.9%and reach $71 billion by 2021.

With the continued and expected growth of the Retail Industry, VAT introduction will have implications to retailers to maximize their recoverable VAT and manage costs of compliance.

Here are some of the FAQs related to Retail Industry:

Who are classified as Retailers?

Business that are purchasing from the wholesalers and selling the goods and services in small quantities to ultimate consumers.

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. (VATSolve)

Import

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

Export

VAT (Output tax) is Zero rated when you, as a VAT registered Retailer, export your Goods and Services outside the UAE.

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 retailer dealing with a high volume of AR & AP transactions, automation and digitisation will significantly helptimelyand accurate reportingwith 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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