Taxable Person : A firm, sole trader, professional or another person who carries out the specific economic activity and who is registered under law or required to be registered under the law is an taxable person. Only a taxable person is allowed to collect tax and remit to the government.
Tax Registration Number: Tax registration number is a unique identification number allotted by Government to a taxable person. The taxable person needs to quote his registration number at the time of payment of tax and all other communication with the Government
Output Tax: The tax collected on sale of goods or services is called as Output Tax. For example, A person sold goods worth AED 1,000 + 5% tax. The Tax of AED 50 collected by the person is an output Tax and excess of output after Input Tax Credit Adjustment needs to be remitted by this person to the Government
Input Tax: The tax paid on purchase of goods or services is called as Input Tax.For example, A person purchased goods worth AED 500 + 5% tax from Day to Day Trading Co. The tax of AED 25 paid by this person is an Input Tax.
Input Tax Recovery : It is a mechanism of adjusting the input tax with output tax. In above used examples, the person has an output tax of AED 50 and input tax of AED 25. Now, this person would adjust the input VAT of AED 25 with output tax of AED 50 and would pay balance AED 25 to the Government.
Tax Period: Tax period refers to a period for which the tax payable needs to be calculated, statement needs to be prepared with relevant details and submitted to government. Usually, tax period are monthly, quarterly or annually.
Tax Return: Tax Return is a statement to be prepared and submitted by a Taxable for a tax period. This statement usually contains the details of Sales, Purchases, Input Tax, Output Tax and Net Tax Payable.
Taxable Person : A firm, sole trader, professional or another person who carries out the specific economic activity and who is registered under law or required to be registered under the law is an taxable person. Only a taxable person is allowed to collect tax and remit to the government.
