Why Companies Require Tax Consultants/Agents In The UAE?
UAE is going to complete its second year of the implementation of VAT successfully. According to most sources, implementation of VAT was smooth, transparent and successful despite some initial challenges. The Federal Tax Authority (FTA) was proactive in publishing user and industry guides as a part of pre-implementation and post-implementation process/support which was a key reason for this success. Another was tax consultants and tax agents that supported companies and taxable persons in the UAE to get compliant with the VAT regime.
VAT is relatively a new concept for many UAE businesses. Most businesses find it difficult to navigate VAT on their own due to little or no exposure to tax in the UAE. As a taxable entity, it is crucial to ensure that the business is compliant to VAT laws and regulations. Having a tax expert on your side is imperative to avoid errors, penalties and loss of reputation.
If you set a tax consultant on your side, yes of-course you can sit and relax back without bothering the hassles of VAT return filing.
How Tax Consultants/ Agents help you?
- A tax consultant/agent raises awareness and helps businesses to stay true with the VAT regime whilst an appointed tax agent can act as an intermediary between the FTA and the business.
- Undertaking the VAT assessment of a business by a tax consultant helps it to prepare for all the processes it needs to undertake and the changes that must be made to work-flow, documentation, accounting, invoicing and ultimately reporting with minimal human inputs.
- Tax consultants also assist businesses in registering in time and ensuring that they meet the registration criteria including Tax Group registrations.
- The primary role of a tax consultant, after the initial registration and assessment is to ensure accurate, timely and reliable VAT returns.
- By using their expertise, tax agents and consultants assist businesses to avoid errors, claim rightful input taxes to maximize profits and help businesses to best manage their cash flows, especially when credit periods to customers exceed the VAT returns period.
- Tax consultants/agents can also assist in reviewing the VAT returns already filed (health-checks) for accuracy and documentation/records maintained by the taxable persons as per the requirements of the tax law.
- Appointed Tax Agents are also able to assist businesses with tax audits and responding/representing the taxable person with the FTA in case of queries. This includes Arabic language capabilities as Tax Agents are mandated to have this capability.
- Tax agents are often required to liaise with the FTA on behalf of the client for dispute resolution and reconsideration of decisions issued by the FTA. This can lead to significant savings for the business.
- Tax laws are subject to change from time to time and keeping abreast of all relevant statutes and laws is the need of the hour. Tax consultants/agent by doing so ensure that businesses do not fall foul on account of not keeping up with the latest regulations and incur penalties.
Tax Agents Are Certified Professionals
Though any professional with requisite qualification and tax experience may assist businesses as tax consultant or adviser, FTA governs individuals and firms that can act as Tax Agents / Tax Agency in the UAE. The FTA has set certain criteria for Firms and individuals before they can act as Tax Agents/ Agency. Some of the criteria are set out below. As is evident, it is FTA’s endeavor to ensure that capable and qualified individuals act as Tax agents so that they are equipped to advise businesses in the UAE.
- A minimum of three years of practical experience in taxation, accountancy or Law.
- Proficiency in both Arabic and English languages.
- Should have qualifications such as Bachelor’s or Master’s degree in tax, law, or accounting from an accredited educational institution.
- Pass the FTA examination with a passing grade.
- Physical fitness to undertake the duties and responsibilities as a tax agent.
- Must be covered by professional indemnity insurance.
- Must possess a clean record with no crime or misconduct.
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