Why VAT Became an Important Factor For Business?
VAT is the abbreviation of value-added tax. Nowadays VAT became a need for every business became it saves out a lot of wealth that we pay in shape of value-added taxes. Value-added tax is imposed on all business whether they are providing services or goods. It is imposed on the time of goods purchase but it is a recoverable tax. Only those people can recover their value-added taxes that are value-added tax registered. The procedure of value added tax registration is very simple. Even you can register yourself online.
Within few days you will receive confirmation from value-added tax department and they will allow you a VAT registration number. After getting your VAT registration number you will be eligible to recover your value-added taxes. Sorry to say that majority of people doesn’t aware of VAT but you can consult about VAT from any reputed VAT Consultancy firm like IAXCESS UAE. Now I will discuss some important point about the value-added tax that will prove that VAT has become an important factor for your business.
Based on value-added not on total price:
Value added tax based on value-added not on the total price of goods and services. So it is the best way to save your money. In sales tax the tax imposed on the total price of goods and services whether the value of these goods and services are low. Value added tax imposed according to the value of goods and services. It is the plus point in value-added tax.
Costly to implement but beneficial for future:
VAT is costly and difficult to implement because it implements on full billing system which makes them costly but you can hire any VAT consultancy firm like IAXCESS UAE which is the best VAT Consultancy in UAE. We can say that is the initial cost of VAT implementation is high but later it is very beneficial for your business because people do more trust in those companies which is VAT registered. Value-added tax registration is a good way to generate Good-will for your company. Good-will of a company is always directly proportional to the productivity and profit.
Simple to administer:
Value-added tax is easy to administer as compared to other indirect taxes like sales taxes etc. value added taxes are transparent taxes. some taxes are hidden from buyers and they don’t aware of these taxes but in case of value-added taxes, there are no hidden taxes. Due to its transparency, they are easy to refund without any confusion.
Recover VAT up-to previous 4 years:
After VAT registration you are eligible to recover your previous four years value-added taxes. Suppose you paid thousands of money in sense of value-added taxes and now you are able to refund your all taxes. you can refund your value-added taxes up-to previous four years. This is a motivating factor for everyone who is thinking about VAT to implement on-to their business.
Less chance of tax evasion:
There is very fewer chances tax evasion in value-added tax because there is no hidden taxes include in value-added tax. That’s why you can easily refund your value-added taxes after VAT registration. Value added tax minimize the effect of evasion because it based on complete billing system and it reduces the effect of evasion due to complete catch-up system.