VAT for Construction Companies
Construction sector will be included in the VAT regulations and will attract the Standard rate of 5% VAT. Companies in the construction sector needs to plan in advance due to the long term of their projects.
All the businesses in the construction industry of UAE are now demanding for the invoices as everyone want to clear all their pending invoices before the year ends. After the announcement from Federal Tax Authority (FTA) all the construction sector businesses are following the same pattern.
Most of the contractors are putting an official statement in their contracts or agreements that the clients are liable to pay any VAT applied to anything related to their services, except for their service fees. UAE is witnessing a huge number of construction projects and plans because of the upcoming Expo 2020.
UAE’s construction industry are making a lot of mistakes while handling their tax issues. In result of the mistakes they are getting heavy fines and penalties by the Federal Tax Authority (FTA) and this is actually impacting their businesses. UAE’s Construction sector companies should avoid making common mistakes by hiring a Registered Tax Agents by the FTA in order to run their businesses smoothly. Construction companies in UAE are making following errors:
Common errors/Non compliance of FTA Law
- Issued invoices different from FTA Prescribed format (That mistake may lead to 5,000 AED fine)
- Wrong VAT treatment for Retention
- Wrong treatment for Transport services for staff/labors
- Provide wrong figures in previously filed returns (If difference is more than AED 10,000 VAT than it needs to be adjusted in same quarter), if those error find by FTA Assessor then minimum fine will be AED 30,000
Read more about VAT Fines and Penalties in UAE!
TAX Agent Services
Managers/Decision makers should take the TAX AGENT services and should not be worried about VAT as currently instead of putting efforts on business growth, they are stuck in VAT related operational matters. So due to this they are spending their valuable time on VAT related issues and profitability decreases.
As we are accredited tax agents so we are also providing Tax agent services, where we are taking responsibility regarding VAT from client to our shoulders, we are taking care of all VAT in UAE related matters for previous year and current year. Feel free to contact us now!