On the basis of the profit margin scheme, three main categories have been determined by the FTA of the eligible goods for VAT in UAE.
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What are the “Eligible goods”
Second-hand goods are the ones which can be reused as it is or after the repair as well. They come under the tangible property. Antiques are the goods that have an aesthetic value and are considered valuable And collectors’ items are considered as eligible goods for VAT. It has been declared by the authorities that the goods that had been subject to VAT previously before they got supplied ae to be subjected to the profit margin scheme. The profit margin scheme is basically the scheme which is the difference between the buying and selling price of any product. Note that the profit margin scheme is inclusive of all the taxes. The supplies ought to be confident about the fact that the good has been subjected to VAT previously so that the profit margin scheme can be applied. The tax invoice is to be taken by the person as an evidence to make sure that the tax has been paid for the item. All the goods and items are to be checked properly so that it can be verified whether the tax has been paid on the items previously or not. those goods that have not been subjected to VAT previously would not be allowed to be in the profit margin scheme. This is because only those goods are eligible to be in the profit margin scheme on which the VAT has already been paid. This is why VAT is due on the full selling price of these goods. It has been further explained by the authority that a business who is already registered by VAT is allowed to apply the profit margin scheme to the eligible goods in the circumstances given below;
- If the goods are purchased by someone who is not registered for VAT
- who is not a taxable person
- who calculated the VAT on the supplies by reference to the profit margin
- In case the taxable person made a supply of goods etc
The person not allowed to apply the profit margin scheme
If the person has issued a tax invoice or any other document in which the VAT amount is to be paid, a taxable person will not be allowed to apply the profit margin scheme. The people who are taxable according to the rules and regulations of the VAT must keep an inventory of all of their records so that it may give a clear idea about each and everything.
Keep a proper record
All of these minor details are to be kept in mind and people need to know what are the eligible goods and what not. If any item has been bought by the person who has not been registered under the VAT, the taxable person will be required to issue a self-invoice. This self-invoice will basically demonstrate all of the purchase details. if you want to know more about VAT Consultancy in Dubai visit here – Tax Agent UAE