For the purpose of calculation of VAT, the Profit Margin Scheme is really significant. To supply the goods in UAE, there are proper conditions in which all of these things come under the Profit Margin Scheme. But the main question arises here is what actually the Profit Margin Scheme is? Here is your answer.
What is Profit Margin Scheme?
When the person who is taxable gets an option to calculate the tax on the earned Profit Margin Scheme on supplies rather than the sale value, it is considered to be the Profit Margin Scheme.
Availability of Profit Margin Scheme for the supply of goods and services
The answer is quite simple yet all the people need to pay attention to it. the Profit Margin Scheme Is applied to the supply of different goods but it is to be kept in mind that the Profit Margin Scheme is not at all available on the supply of services. If you are providing certain goods, Profit Margin Scheme will be available for you but if you supply services, Profit Margin Scheme will not be applied on you.
Supply of goods under Profit Margin Scheme under VAT in UAE
As we all now know that there are certain goods that can be supplied under the Profit Margin Scheme under VAT in UAE. Now you must be thinking what sort of goods is those that can be supplied under the Profit Margin Scheme. Here is the answer;
The second and goods which are considered to be in the tangible movable property come under the Profit Margin Scheme under VAT in UAE. this is because they can be used after repair or as it is after their first owner as used them.
Goods that are very old or are over 50 years old are considered as antiques. They also come under the Profit Margin Scheme
Old things like stamps, coins and other such things come under the category of Collectors’ items. They are also available under the Profit Margin Scheme
The reason behind the Profit Margin Scheme
The Profit Margin Scheme is applied to those goods that are second hand, collector’s items or antiques. They can be reused by the people after being used first or after repair as well. these are for the purpose of making profit which is why the VAT has been levied on such items. People can thereby use them to earn more profit from them. that is why if such a thing is supplied, no VAT would be applied to it. If you are in trouble take help from UAE Vat consultants.
Goods purchased from a person registered for VAT?
The vat on the supply will get levied if the person purchased the second-hand goods from a person who has vat registration in Dubai, UAE, if the margin scheme is being opted by the supplier on the second-hand goods, the dealer will no longer be eligible to recover his tax. Go to this link https://farahatco.com/services/vat-registration-uae/ for more detail and info.
There are so many other aspects of Profit Margin Scheme as well which you need to know. So, make sure that you do get an idea about all of them. Now other gulf countries like Oman going towards vat implementation.