Basic information about VAT

VAT as known as Value Added Tax, is basically a form of consumption tax that is applied on various services or goods given to consumers. In business terms, revenue or profit earned by any business by supplying goods is taxable. So they add value added tax in total price of any item. Thus this tax portion from business sale is paid to government in form of annual tax. VAT is basically paid by buyers of these goods or services. In many countries, larger part of economy is dependent on VAT because almost every business has to pay it. If not VAT, government will imply other form of taxes on end consumers. To learn more about it you can also go to any VAT consultant Dubai, to have a complete understanding of tax system. In Dubai, the attraction of tourists is shopping. The VAT is thus a complex system and great deal of business so it is important that you take expert advice on how to deal with it.

We know the fact that we have to pay VAT when we purchase goods or any services. It is usually added in final amount we pay. It is sort of indirect tax that we pay for consumption of goods or services. This tax is collected from customers and paid by actual manufacturers or producers upon selling or transfer of these items.

Advantages of VAT:

  1. Security of revenue: In this system, the buyer will have interest in underestimating his purchases at final stage. This is because the deduction process enables the buyer to get tax refund at the final stage. This way tax lose will be minimum.
  2. Selectivity of items: VAT is not applied on every good or item. It is applied on specific goods mostly leaving general goods or daily services depending on type of consumption.

 

Importance of VAT:

It is necessary for every business to enlist itself for VAT. You will be filing tax at the end of year in any case plus you need to submit your payment on time to avoid any serious consequences. However, when you learn here, you will find that the main purpose of this VAT on goods is to enhance the revenue of country. This will help in uplifting the economy of country on a great level, that’s why in Dubai, it is imposed on most items or services as people from all over the world come here to shop.