Value Added Tax (VAT) is a common tax in many countries. This tax is applied at each stage of production or distribution of goods and services. VAT Return is the filing of this tax that is submitted to the related authority. There are several matters needed to be mentioned including sales and purchase, payable VAT, reclaim VAT etc. It has to be submitted even if there is no VAT to pay or reclaim.
This tax is needed on every stage of business whether it is a company registration in Dubai or setting up a retailer shop in Berlin. But most of the people find it difficult while filing VAT Returns. Following are few easy ways that you can use for VAT Returns that are helpful in saving both time and money.
1. Do it in time
VAT is an important source of income for governments to run the country. It is the reason that they are very strict on this issue and want to get this tax as early as possible. VAT Returns play an important role in flow of cash to government. Therefore, there is a penalty and hefty fine on late submission of filing.
This makes it very important to file VAT return in time and ultimately pay the tax in time. It will save you from pay extra on VAT and also avoid other problems emerging with low reputation. Therefore, it is important to give due respect to the process and prepare and submit the filing in time.
2. Use digital method
The government itself tries to make this process convenient for taxpayers. For this purpose, online method is also available tothem for VAT return. Paying VAT Returns online not only saves lot of time for taxpayers but it also increases time factor for you to handle any situation. For instance, there is little risk of making a mistake because of availability of additional time. Even if you make a mistake or need something extra to fill later, then there is appropriate time to make corrections.
3. Avoid unnecessary claims
Everyone wants to make claims to get maximum benefit from Tax. But it is nice to paly safe according to law. It is mandatory to avoid unnecessary claims. You must be fully informed about matters that allowed you to make claims and also about those that are unfit to do so. Usually claims to back VAT on non-business expenses, purchases of vehicles etc. are not allowed. These unnecessary and false claims can even result in penalties.
4. Don’t wait to claim VAT
It is also wrong to take unnecessary time to claim back VAT. Try to complete this process as early as possible. It will not only help you in settling financial matters but also make it easier for authorities to calculate these claims.
5. Flat rate scheme
Several schemes are also initiated by the government in order to ease the calculation of VAT. One such scheme is the flat rate scheme. Using this scheme will allow you to calculate your tax as a flat rate percentage of your income. With this scheme,you don’t need to account charges of VAT on every sale separately that is helpful in saving time and money.
6. Cash Accounting Scheme
Such scheme is allowed if the annual income is less than already defined sum. There is a limit applied for this scheme and the entrepreneurs crossing this limit can’t avail this advantage. You should take advantage of this scheme in case of eligibility as it helps in cash flow. This is really helpful if your customers pay your bills late. But under this scheme, reclaiming VAT is only possible after you pay to your suppliers.
7. Annual Accounting Scheme
Mona is working as a consultant and content writer in a Dubai-based consultancy firm, Riz& Mona Consultancy. She has 6 years of experience in the field. During her writing career, she has gained experience in writing for several business niches including VAT, other types of taxation, finance, small business, investment, trade, and others.