VAT has a negative connotation to business owners. Aside from extra paper work needed to fulfill the obligations, it may also mean additional costing and adjustments in pricing without losing the product’s competitive edge.
But there is a bright side to everything and any tax consultancy company UAE-based would agree that there is a silver lining to this. If you are not convinced that you need to have your company VAT-registered, then these reasons might convinced you.
- Make you look good for partners and investors
A lot of businesses are finding it hard to improve the image and branding of their company. One thing that can help enhance your brand image is by being a VAT-registered company. By being a VAT-registered company, you are making your company legit and looked like very established enterprise. This could attract lenders and investors as they view VAT-registered companies as legit, big, and established. Moreover, registered business can put their VAT number of their marketing collaterals (letterheads, receipts, etc.) to add more legitimacy to the business.
- Makes you attractive to prospective clients
Believe it or not, clients find it attractive to deal with a VAT-registered company than an enterprise that is not VAT-registered. This has to do with the fact the company appears larger and more legit. It could also mean that you are compliant to the standards being set by the government. This would give your business an air of credibility to your clients and customers. This can lead to increase in sales and enhanced customer-retention rate.
- Become eligible for VAT returns
One of the perk of being a VAT-registered company is that you are qualified for a VAT returns and reclaims. These instances happen when you purchase goods and services for business use. These goods and services may range from – utility bills to construction bills incurred by the company. Check with VAT consultants Abu Dhabi professionals to know what good and services are accepted for reclaims and returns.
- Improve your business accounting
For countries and location who are dealing with VAT for the first time, they would need to make the necessary adjustments to their accounting system to incorporate the VAT computation. This might look like additional work, but it is also an opportunity to check your accounting system and if it is still working for you. Since you have to include the new tax computation on your business finances, you can see whether there is a loophole on your business accounting and make adjustments if necessary. Once your finance and accounting team get the hang of it, it would be easier to compute profits, payables, receivables, and taxes incurred.