Rayan FaroukIn this new series of blogs, we will talk more about Balsam Medico and give you an insider scoop of everything Medico. In this blog, we will talk about VAT Taxes.
With the help of ECAG’s “Handbook on VAT Applicability in the UAE Healthcare Industry” document, we can help you understand everything about the VAT tax.
Before we discuss how we may assist you in managing that, let’s first discuss what a VAT tax is.
What is VAT tax?
Value Added Tax (VAT) is an indirect tax that is applied based on consumption and use of products or services. It’s the responsibility of the Federal Tax Authority (FTA). The standard rate is 5% but, certain healthcare services and related goods are a Zero-rate tax.
All dental clinics in the UAE are subject to VAT regulations. Even the free zone Dubai Healthcare City is not exempt from the rules.
The VAT is calculated and collected based on the value of the supplies that fall under taxable supplies, and it’s measured as a percentage. It is collected by the healthcare facility at the time of invoicing or payment.
Should your clinic register for VAT?
According to the handbook; All private dental clinics should register for Vat if their taxable supplies exceed the mandatory registration threshold of AED 375,000. If you fail to register, this could lead to an administrative penalty for late VAT registration.
It’s important to note that any service or product provided by a healthcare facility or professional that is subject to the 5% VAT tax rate is called Taxable Supplies.
Dental clinics are no strangers to VAT taxes. According to the VAT decree law, any dental service provided to the patient for preventive or medical treatment purposes is subject to a 0% VAT rate. This includes treatments that are needed to prevent and improve the well-being of any patient, such as:
- Crowns
- Implants
- Endodontic dentistry
- Bonding performed to treat a damaged tooth
Dental services that are provided for cosmetic reasons and are not necessary for the prevention or well-being of any medical condition are charged at a 5% VAT rate. This includes:
- Whitening / Bleaching
- Shaping
- Bonding
- Orthodontic Dentistry
Now how can Medico help you with your VAT tax calculations?
As you know, Balsam Medico is impeded with a complete accounting system. Every invoice and payment record is drafted and saved into our system.
And how can we help you with VAT tax? Simple, with our VAT TAX feature. Open the Finance tab, under the settings section, and click on VAT Taxes. Add the VAT tax of 5% or any other tax percentage and choose the service(s) or treatment(s) that the tax applies to.
Now when each service or treatment is added to an invoice, Medico automatically calculates and adds the VAT tax from its cost to the total amount of the invoice. So you don’t have to worry about adding the VAT tax manually each time when drafting an invoice, Medico does that for you!
If a new treatment is introduced into the clinic and applies to the VAT tax, you can easily add it by editing the VAT tax and choosing the new treatment from the list.
Simultaneously, Medico is equipped to automatically report every transaction that includes the VAT tax to a respectable report. On the Reports page, one of the reports is a VAT Report.
This is a report of every VAT tax that has been calculated by Medico from all invoices. You can view the report in periods, either today’s, the past 30 days, the past 12 months, or by selecting a custom time.
The report includes the date of the transaction, a description of it and the input and output of the transaction. Beneath it is the total amounts of input, output and the net.
In a few simple steps, you have added the VAT tax to Medico. Now sit back while Medico calculates the tax in every invoice and gives you a detailed report.
If the report present isn’t up to your liking and you request a more detailed report, we got it covered. With our Dynamic Reports feature, we can provide you with a report including all the data you request.
Our mission in Balsam Medico is to make your workflow a seamless operation, stress-free and productive. Thus adding features such as the VAT tax to help you with your accounting and finances.
We’ve got much more to discuss in future blogs, so stay tuned for that. If you can’t wait to learn more, reach out to us for a free demo online or at your clinic.
Connect with Us
Ready to embark on this exciting journey? Contact us today: 📍 Dubai, United Arab Emirates – Tel: +971 56 123 6043 📍 Khartoum, Sudan – Tel: +249 91 273 1048
Explore Balsam Medico and discover a world of efficient clinic management at www.balsammedico.com. Together, let’s reduce fines, elevate efficiency, and embrace a new era of dental healthcare.
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