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How to verify VAT TRN (Tax Registration Number) on Tax Invoice in UAE ?

Please note that earlier to verify the TRN Number it was necessary be a registered user on FTA website. But now it’s is not required to be registered hence any person registered with FTA website or not could check the TRN number of the suppliers who is charging them VAT.

Steps to verify TRN number in UAE • Visit Federal tax website (www.tax.gov.ae)
• Look for tab Getting Help.
• While you hold pointer/mouse cursor on Getting Help Tab you would see TRN Verification and click
• Enter TRN number of you supplier/service provider as provided on tax invoice.
• Enter security code
• Click validate
• If TRN number provided by supplier/ service provider is correct it would provide the corresponding name in English and Arabic with the respective tax registration number in issued in UAE by the FTA (Federal Tax Authority) .
• Validating the TRN on the Tax invoices received would simplify and ensure correct filing of VAT returns and settlement of payable tax within the time stipulated by FTA UAE the provided is correct.

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UAE banks may hike fees to offset additional VAT costs

Provided by Khaleej Times As banks in the UAE grapple with the new value-added tax (VAT) regime and the high compliance costs associated with mandatory tax registration, it is likely that they follow international trends by increasing their fees to compensate for the additional costs, banking analysts said.

"We believe it quite probable that banks will eventually be forced to increase prices to their customers to maintain their current profitability," Clare McCol, partner, head of Indirect Tax at KPMG, wrote in 'UAE banking perspectives 2018', report.

"Where banks suffer significant, irrecoverable VAT costs, and/or treat existing taxable fees as VAT inclusive, there may be incentives to cut costs in other areas. As there is no VAT charge on employee salaries or using own resources, banks that currently outsource services, such as back-office activities or call centres, may elect to bring these services in-house to mitigate potential, irrecoverable VAT costs," McCol said.

The executive regulation on the UAE VAT law has a detailed definition of financial services and distinguishes products and services on which VAT is applicable. As per the law, most financial services are VAT exempt in the UAE. The Federal Tax Authority (FTA) has said products with an explicit fee, commission, rebate or discount would be subject to the regular 5 per cent VAT, while interests on forms of lending including loans, credit cards and finance leasing would be exempt. In the case of credit card related services, while the interest is not taxable, annual fees on credit cards will be subject to VAT. In the same manner, while foreign exchange spreads are not going to be taxed, 5 per cent VAT will be applicable on remittance fees.

The authority also said the issue, allotment or transfer of an equity or debt security would be exempt as will be the margin-based products that do not have an explicit fee, commission, rebate or discount. S&P Global Ratings is of the view that banks will pass on some of the VAT increase to their clients to avoid increasing fees and commissions levied by the full VAT amount.

"We also believe banks will incur VAT as part of their general spending. These assumptions lead us to expect a slight negative impact of VAT introduction on banks' profitability," said Mohamed Damak, head of global Islamic finance at S&P Global Rating. According to experts, as a general rule, exempt financial services will include spread-based products and service and margin-based products (those generating interest income). And finance facilities with profit rates in the case of Islamic banking are exempt. Thus products such as loans, mortgages, credit cards etc are in the VAT exempt category.

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When should you account for VAT return filing as per FTA?

VAT Return Filing must be done by not later than 28th day of the month following the Tax period or by such other date as requested by FTA. For example; if your first VAT return period is January 2018 to March 2018, your VAT return due date will be 28th April 2018. Where a payment is due, it should also be paid by the same deadline. Where the due date falls on a weekend or a national holiday, the deadline is extended to the first business day thereafter. Late filing of VAT return attracts penalty of AED 1,000 for the first time of occurrence of a delay. The penalty would be increased for subsequent non-compliance of filing of VAT Return.

The standard Tax period applicable to a Taxable Person is a period of three calendar months. However, FTA has assigned different Tax Periods for certain group of Taxable Persons. Some of them have Tax Period on monthly basis. A Taxable Personhas an option to request to the FTA to change his Tax Period. However, it is at the FTA’s discretion to accept the request.

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