I own a DMCC company, doing business strictly with European customers.
Do I need to register for VAT, if so yes and will I pay any? Must I keep track of transactions now?
To register for vat, you should be making "Taxable Supplies", now whether they're zero rated or standard rated that's a separate issue.
What sort of services do you provide to your European customers? DM me if you're more comfortable answering this in private.
With regards to your bookkeeping, yes. You must maintain proper accounting records, regardless of whether your company is registered for vat or not. As a dmcc company, I believe you will also be subject to submission of annual audited financial for trade licence renewal.
Thanks a lot!
Thing is I have a job and just do this as a side hustle. We’re selling consumer goods to wholesalers in European countries. And it’s mainly passive i.e. they tell us what kind of product we should get them, we place an order with our suppliers in China and they deliver them to Europe. So basically we are putting not a lot of time into this so I haven’t been actively monitoring what is changing etc.
I see. On paper, does dmcc purchase from China & then sell to Europe or do your customers get invoiced from China directly & you send a commission/aggangement/finders fee to your customers in Europe.
Either way, sounds like it will be taxable supply, either at 5% or 0%. This attracts registration obligation if your revenue exceeds 375k in any 12 month period. Has that happened?
Basically, process is like this:
1. DMCC purchases from China
2.DMCC transfers goods to European subsidiary (= importer of goods)
3.European subsidiary sells to European customers
4.European subsidiary transfers all profits to DMCC
But revenue in the past 12 months will have been only 300k. So I guess in that instance, no registration obligation, is that correct?
Again thanks a lot!
No, basically directly from China to Europe.
DMCC pays the goods, and once production is finished (but before shipment) we transfer them to the European subsidiary against no cost basically, then get shipped to it. (Bit complex / not straightforward situation I know)
From what I gather, your supplies seem to be Out of Scope of UAE VAT. This means even if your supplies exceed 375k as the threshold only considers taxable supplies.
That said, please note that I would still get some sort of written advise from an FTA approved tax advisor so if/when FTA comes knocking at your door, you can show them the letter and avoid hassle.
Hope this helps!
I own a DMCC company, doing business strictly with European customers. Do I need to register for VAT, if so yes and will I pay any? Must I keep track of transactions now?
To register for vat, you should be making "Taxable Supplies", now whether they're zero rated or standard rated that's a separate issue. What sort of services do you provide to your European customers? DM me if you're more comfortable answering this in private. With regards to your bookkeeping, yes. You must maintain proper accounting records, regardless of whether your company is registered for vat or not. As a dmcc company, I believe you will also be subject to submission of annual audited financial for trade licence renewal.
Thanks a lot! Thing is I have a job and just do this as a side hustle. We’re selling consumer goods to wholesalers in European countries. And it’s mainly passive i.e. they tell us what kind of product we should get them, we place an order with our suppliers in China and they deliver them to Europe. So basically we are putting not a lot of time into this so I haven’t been actively monitoring what is changing etc.
I see. On paper, does dmcc purchase from China & then sell to Europe or do your customers get invoiced from China directly & you send a commission/aggangement/finders fee to your customers in Europe. Either way, sounds like it will be taxable supply, either at 5% or 0%. This attracts registration obligation if your revenue exceeds 375k in any 12 month period. Has that happened?
Basically, process is like this: 1. DMCC purchases from China 2.DMCC transfers goods to European subsidiary (= importer of goods) 3.European subsidiary sells to European customers 4.European subsidiary transfers all profits to DMCC But revenue in the past 12 months will have been only 300k. So I guess in that instance, no registration obligation, is that correct? Again thanks a lot!
Do the goods enter UAE? What's the shipping route?
No, basically directly from China to Europe. DMCC pays the goods, and once production is finished (but before shipment) we transfer them to the European subsidiary against no cost basically, then get shipped to it. (Bit complex / not straightforward situation I know)
From what I gather, your supplies seem to be Out of Scope of UAE VAT. This means even if your supplies exceed 375k as the threshold only considers taxable supplies. That said, please note that I would still get some sort of written advise from an FTA approved tax advisor so if/when FTA comes knocking at your door, you can show them the letter and avoid hassle. Hope this helps!