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Our Clientele & Industries

Real Estate

VAT Prospective:
The real Estate supply considered to be property consisting of land or building. The time of supply rules for real estate as per article no 25 and 26 of decree law no 8 of 2017 should be applied to real estate supplies according to existing circumstances. The place and nature of supply play an integral role in identifying the VAT treatment of real estate. Supply of real Estate could be either commercial or residential depending on the intended use of the supply. Also, it could be by sale or lease. The supply of real estate may fall among one of four treatments for VAT purposes:
 
  • Exempted: like supply of real estate for accommodation purposes if it does not represent a first supply.
  • Taxable at 5%: like supply of commercial units or services accommodation apartments.
  • Taxable at 0%: like the first supply of residential units.
  • Out of scope: Yes, supply of real estate is considered as supply of goods; accordingly, any supply of real estate for a property that is in a designated zone or outside the state is treated as out of scope for VAT purposes.

For more information, please read the attached VAT clarification issued by the Federal Tax Authority on this regard.

Bookkeeping and Accounting prospective:
When it comes to accounting and maintaining books of accounts for the real estate activities; it mandates control, follow up, and timely reporting to ensure the following:
  • Timely renewal of expired leases.
  • Follow up of bounced cheques.
  • Control of maintenance charges.
  • Adequate control on cash collection and bank deposits.

Finally, despite the fact of huge investment in this sector, the real estate leasing falls among the most secured investments in the UAE if is being managed closely and controlled properly.

Hospitalit

VAT Prospective:

Hospitality services include the supply of restaurants, hotels, and catering services. as per article 30 of VAT decree law no 8 of 2017, the place of supply for hospitality services shall be where such services are actually performed. Briefly, if the place where the services are performed fall within the state, the supply shall be subject to VAT at the standard rate even if it’s within a designated zone (Generally services is deemed to be within the state if are provided by a taxable person within UAE) An important pint to be considered related to hotels is the import of services from overseas which is subject to VAT at the standard rate by the importer. In some cases, hotels within the state does import services like consulting or the right to use a brand name which mandates the declaration of VAT by the importer under RCM mechanism as per article no 48 of VAT decree law no 8 of 2017.

Bookkeeping and Accounting prospective:
The systematic process plays an integral role in recording and accounting for hospitality industry for the following reasons:
 
  • Huge volume of transactions that may be existing;
  • Involvement of cash in most of transactions;
  • Advance payments concept that is applicable which require adjustments regularly;
  • Payments received on behalf of other government authorities;

Trading activities

VAT Prospective:

Supply chain, location of goods’ recipient, tax point, advance payments, sales returns, warranties, ownership transfer date, free samples and many other factors should be clearly analyzed and understood to ensure the correct implementation of VAT within the trading industry. Also, direct, and indirect export is considered one of the most complicated matters due to documents requirement and being treated as zero rated supply when applicable.

Bookkeeping and Accounting prospective:
Even though accounting for trading industry is simple, but many indicators shall be monitored closely and regularly to preserve the low margin achieved due to increasing competition and challenging economic conditions. The fast-expanding desire should be supported by proper working capital management to maintain the sufficient cash necessary for operations. Our professional team will add remarkable value in the following areas:
  • Inventory and slow moving items.
  • Accounts payable and credit control.
  • Regular financial reporting.
  • Receivables and collections.
  • Working capital management.
  • Customers and suppliers reconciliations.
  • Import and RCM proper bookkeeping.
  • Export and Zero rated VAT treatment.
  • Future projection and business planning.

Construction & Development

VAT Prospective:
Construction services supplied within UAE are subject to VAT at the standard rate, this VAT treatment shall be applicable regardless the building is commercial or residential. The complexity arises for determining the date of supply, the date of supply rule for such continuous supply is the earlier of the following in condition that 12 months have not passed since provision of services:
  • Receipt of payment.
  • Completion of services.
  • Issuing tax invoice.
Bookkeeping and Accounting prospective:
The complexity of accounting for construction activity requires a professional accountant for the following reasons:
  • Tracing direct and direct costs.
  • Allocation of costs on projects.
  • Cash flows management.
  • Duration of projects and finance channels.
  • Revenue recognition and milestone payments.

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Abuhashima Mahdy Tax Com.

Abuhashima Mahdy

3 hours ago...

Hi!
How can i help you :)

11:01 PM | October 11