|Type of paper:||Problem solving|
Article (1): Definitions
Value-added tax (VAT) refers to tax that is imposed on the supply and import of goods and services at stages of production and distribution. For example, importation of goods from another country will impose VAT on that product. A country may reduce the tax to promote importation or else increase it to discourage importation.
Article (2): Supply
Supply of goods is transferring the ownership of goods from one individual to another. An example of supply of goods is transferring the ownership of a real estate from one person to the other.
Article (3): Supply of Services
Supply of services is the distribution of services from the ownership of one person to another. An example of supply of services is transferring of intangible rights that include rights of inventories, authors as well as trademarks rights.
Article (4): Supply of more than One Component
This is when an individual supply several components for one price. For example, the supply of components with the inclusion of incidental elements that is not a significant part of the principal component.
Article (5): Exemptions related to Deemed Supply
This occurs when supply is not taxable according to the stated Decree-Law. Examples of exemptions in connection with deemed supply include unrecovered Input Tax on particular goods or services and exempted supply.
Article (6): Application for Registration
Application for Registration is the process of acquiring voluntary or mandatory registration required and specified by the Federal Tax Authority. For example, completing online VAT registration form provided by the Authority for the generation of a Tax Registration Number (TRN). Some of the supporting documents for the application are trade license, Emirates Id, articles of association, and Certificate of Incorporation.
Article (7): Mandatory Registration
This is when it is a must for a business to register with the Federal Tax Authority, and its threshold is AED 375,000. An example of mandatory registration is when an individual is not a resident United Arab Emirates and has to register with the Authority to begin making supplies.
Article (8): Voluntary Registration
This is whereby an individual registers supply for VAT even when the threshold is below AED 375,000 to benefit from VAT registration. For example, an individual can have a voluntary registration if supplies may exceed the current threshold in the next 30 days as a way of reducing Tax expenses.
Article (9): Related Parties
This is when a person or more have an association with financial, economic and regulatory matters. For example, if the parties involved are working towards a common commercial goal, if the business of one person benefits the other or the supply of different services or goods to same customers.
Article (10): Registration as Tax Group
This is when a Tax group selects one registered member to represent other members of the Group. For instance, the authority may register member of the Tax Group to represent other members if all legal documents and processes adhere to the Law.
Article (11): Amendments to a Tax Group
This is when a selected member of the Tax group requests the Federal Tax Authority to make changes to the agreement. Examples of amendments are adding a person to the Tax Group, removing a person from the Tax Group, deregistration of the Tax group or nomination of another representative for the group.
Article (12): Effect of Registration as a Tax group
This involves the registrations of individuals in becoming a Tax Group to ensure that all members become jointly and personally liable for paying a tax of the member representing them. For example, every output tax that is charged by one of the members has a consideration as charged by a representative.
Article (13): Aggregation of Related Parties
This is when persons having a partnership in economic, regulatory or financial aspects do not have registered as a Tax Group, and they operate under segregated businesses leading to the aggregated determination of their thresholds. For example, the Federal Tax Authority may consider supplies of each as aggregated in the determination of total taxable supplies under either voluntary or mandatory registration threshold.
Article (14): Tax Registration
The registrant applies to the authority to request for deregistration within 20 business days. For example, a registrant may apply for tax deregistration after stopping to make supplies or when taxable expenses are below the voluntary registration threshold.
Article (15): Deregistration of a Tax Group or the Amendment Thereof.
This is when the authority deregisters a tax group basing on specific principles and procedure set by the law. An example of a situation that can lead to this kind of deregistration is when the registered persons do not meet the qualifications for registration as a Tax Group.
Article (16): Exemption from Registration
This occurs when a taxable person is applying for exclusion from tax when supplies are zero-rated. For example, a person whose supplies are zero-rated can apply for a tax exemption within ten days of making imports or supplies that have a standard rate tax.
Article (17): Registration when the Decree-Law Come into Force
This was when a taxable person applied for tax when the Federal Decree law came into force. For instance, a person who applied for tax registration before the law becomes operational has same obligations and rights as if the processing of registration occurred after the law came into effect
Article (18): Liabilities due before Deregistration
The process of deregistration does not exclude individuals from their obligations or liabilities set by the Federal Decree-Law. For example, a deregistered individual still has the obligation and liabilities of having all requirements as a taxable person in case of another registration in future.
Article (19): Due Tax Date of Supply
This is when the tax becomes due as its payment occurs in respect of the supplied services or goods. For example, the registrant makes payment of the supplied goods and services according to the amount indicated on the invoice following the provisions of the Federal Decree-Law.
Article (20): Place of Supply of goods delivered within the state
When some of a supply of goods needed to re-enter or exit the State while still under delivery from one locality to another within the country, such a supply is not under the exported or imported goods. For example, when the re-entry into or exit from the State occur between two locations in the country.
Article (21): Place of Supply of Services Related to Real Estate
By this Federal Decree-Law, a real estate refers to any land, building or fixture on which there is the creation of interests, rights or services. Such entities have particular services related to them. An example of such services is a surrender, grant or assignment of any right or interest over the real estate.
Article (22): Place of supply of Particular Transport Services
This is the place where a supply of certain transport services begins consisting of several stops involving multiple supplies. In this case, supply will have a single tax payment. For example, the transport-related services being offered one price in spite of the stops or multiple suppliers.
Article (23): Electronic and Telecommunication Services
Telecommunication service is the delivery, broadcast, convert or reception of services using communication devices through electronic, electromagnet, magnetic, electromechanical or electrochemical means. Examples of telecommunication services are wireless or wired communications, viewable images as well as signals applied in the transmission of information.
Article (24): Evidence for Some Supplies across the Implementing States
When a taxable person supplies goods to another implementing State, such an individual retains the commercial and official evidence of export of the supplied goods. For example, a taxable person supplying goods from the United Arab Emirates to Qatar retains commercial and official evidence of export of the supplied goods.
Article (25): Market Value
The market value of services and goods supplied is putting into consideration the money that the supply will achieve if the supply occurs under the same circumstance, State, and date in that the supply freely happened between individuals with no connection in any manner. For example, the determination of the market value of goods and services of a supply that occurred under same data, State, and condition.
Article (26): Apportionment of a Single Consideration
This is when the market value of has a single consideration when supplying services and goods when the supply occurs under the same circumstance, State, and date in that the supply freely happened between individuals with no connection in any manner. For example, when a taxable person identifies the part of consideration found in the market value of the supplied goods and services.
Article (27): Price Excluding Tax
For a taxable supply, every published price is included in the tax. For example, the supply of services and good for export has an inclusion of tax.
Article (28): Discounts, Vouchers, and subsidiaries
The State is not treated as offering subsidiary to a supplier when the subsidiary or a section of it has consideration for the supply of services or goods to the country. Supply value only reduces in particular cases when there is the provision of a discount, voucher or subsidiary. Examples of reduced supply value were when the supplier-funded the discount or if the customer is a beneficiary of a subsidy.
Article (29): Accounting for Tax on the Margin
The taxable person calculates tax on every supply of goods using the profit margin. For example, a taxable person may calculate the tax of any supply of goods that are second-hand, antiques or collectors' items because such goods are subject to tax before their supply.
Article (30): Zero rating export of goods
Direct export has a zero rating in some case, for example, when there is physical exportation to a location outside the State that is implementing. On the other hand, indirect export has some situations that allow for zero rating. For example, if the overseas client receives commercial and official evidence of export and customs suspension as per the GCC common policies and then offers the supplier its copy.
Article (31): Zero rating Export of Services
There are cases when the export of services has zero rating. For example, the supply of services to a recipient without a place of residence in the State that is implementing, and at the same time, such a client is outside the country at the moment of performing the service.
Article (32): Zero rating Export of Telecommunication services
There are some cases when the export of telecommunication services occurs under zero rating. An example is when a supply of telecommunication service by a supplier having a place of residence in the State to a supplier with a place of residence outside the State that is implementing.
Article (33): Zero rating transportation services that are international for passengers and goods
For international transportation services for passengers and goods at the international level, the authority can provide zero rating. An example is when the supplier is transporting goods or passengers from one location in the State to another place located outside the country.
Article (34): Zero rating of some means of transport
Some certain transport means are zero-rated during supply. An example of zero rating certain transport means is when there is the supply of an airplane that is adapted or designed for commercial transportation of goods or passengers and not for...
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