Value-added tax is the major form of taxation in the United Arab Emirates. It is applicable to imports and exports too, although the payable amount may differ according to the value of the goods and services. The importers not registered for VAT in UAE may utilize e-guarantee to fulfill their taxation responsibilities.
What is E-Guarantee?
E-guarantee is actually sharing the beneficiary electronically. The importers not registered for value-added tax at the federal tax authority can share their e-guarantee by filling the form. However, there are a few conditions for that.
Conditions for VAT Payment Through E-Guarantee
In order to manage your VAT payment through an e-guarantee, you have to fulfill the following conditions:
- Transferring goods from VAT designated zone to VAT designated zone.
- Importing goods in the UAE under custom duty suspension.
Dig deeper into this article to explore a comprehensive guide about e-guarantee value-added tax payment in the United Arab Emirates.
Top 4 Steps for VAT Payment on Imports in UAE
Value-added tax seems like the most difficult math problem to most business owners or people who are eligible to pay the tax. It adds to the difficulties of the importers who are not even registered in the UAE. However, thankfully the federal taxation authority has introduced a bit simple method through e-guarantee.
Here are the major steps you can follow to manage VAT payments on imports in the UAE.
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Customs Declaration
The very first step in the process is managing the custom declaration. You have to follow the guidelines shared on the customer portal and meet the following conditions:
- Share details of all the imported goods.
- Submit custom declaration for further proceedings.
- Be sure to recheck the details before hitting submit button because it cannot be edited after submission.
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Obtain E-Guarantee
After that, you have to obtain an e-guarantee that substitutes VAT payment from your bank. To obtain that, you can follow this procedure:
- Obtain an e-guarantee for the value equal to the valued added tax payment.
- Get the reference number for that particular e-guarantee.
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Create An E-Services Account on FTA Portal
If you are not already registered on the portal of the federal tax authority, what you need to do is create an e-service account on the portal. The process for the sign up is as follows:
- Use your email id to create a new account.
- Be sure to use a unique password for security.
- Check the verification message on your email.
- Verify the account according to the conditions.
- Use your e-services account to log into the portal of the federal tax authority.
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Fill VAT Import Declaration Form
The last step in the process is filling the value-added tax import declaration form. You have to enter the details of your reference number in order to complete the process. However, if it is too confusing for you and is giving you cold feet, here is a simple solution. Hire the service of the best VAT consultancy in Dubai and let the experts take care of the whole process, from assessing the payment conditions to fulfilling all the applicable conditions.
Steps to Cancel E-Guarantee in FTA Portal
If you do not fulfill the conditions of valued tax payment through an e-guarantee, you are not liable to pay tax in the United Arab Emirates. Therefore, you can cancel your e-guarantee at the portal of the federal tax authority. For that, you have to follow these steps diligently while ensuring there is no mistake in the process.
- Log in to the portal of the federal tax authority.
- Check the tab “VAT” on the home page of the portal.
- Clicking the “VAT” tab, you will get a drop-down menu.
- Find the “VAT 701 – E-guarantee cancellation form” in the menu and click it.
- Fill the e-guarantee form to the best of your knowledge.
- Be sure to provide the following information:
- Import declaration number
- Import declaration date
- E-guarantee number
- Recheck the shared information and press submit button.
- Wait for the confirmation message to appear on your screen.
- Check the confirmation message in your email too.
- Congratulations! You are done.
Follow all the conditions to fulfill your responsibility as an importer!
If you are an unregistered importer in the UAE, you might have to follow an extensive process of clearing your value-added tax payments through an e-guarantee. You cannot just randomly follow this method but have to check if you meet the requirements or not.
After that, you need to check multiple conditions at every step, which can add to your nervousness and confusion. All of this confusion will lead to mistakes and penalties. To avoid all that, contact the professionals and let them take care of all the minutest details so you can focus on your work instead of worrying about VAT.