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cash-flow-writer.docx - cash flow 1-The idea is that when...

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cash flow 1-The idea is that when you import you immediately pay VAT, and If you sell it (later) you need to report the sale and remit the VAT, even though you may not have collected the VAT. The VAT will only be refunded one month after the return is due. This means that the merchant has to pay the VAT, and finance the VAT until such time as his customer pays the VAT to him. In cases where the amounts of money for goods is high, the costs of doing business are increased. 2-Without a Free Zone, the VAT will be due even on goods that are imported and then re-shipped out. In UAE and indeed the GCC we now have three different zones - the designated freezones, (on a list approved by the government) the non designated freezones (excluded by government) and the mainland (the rest of the country) Trading that is confined only inside the designated freezones or between two different designated freezones is outside the vat system entirely. This would suffer no negative cash flow impact. Any other trading which involves the non designated freezones or mainland involve charging and accounting of vat and so the associated cash flow effects arise. when the goods in main port in Dubai, so the goods arrived at ,Designated zone, Jebel Ali and now a company inside Dubai wants to bring them into the country, so they say to the customs we will now pay you. let we suppose that the container the televisions is 1million dollars, so the container now it 's sitting inside the free zone so no Duty no VAT. When the company now in Dubai must say to the customs we want to import these televisions and the custom will say you must now pays us 5% Duty fee now today, so this is January 1st so they've arrived and Customs say you must pay us now 5% Duty, and you must pay as now 5% VAT.
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so on 1million dollars I must pay $50,000 import duty this I cannot get back and I must pay $50,000 of VAT this I can get back but only on my VAT return. So then I bring some out of my bank I have paid 1million dollars to Japan for TV and I have paid $50,000 VATand $50,000 to Dubai Custom. So, In my bank I am now minus, 1,100000 dollars. now I bring them and sell them to customers inside Dubai and I charge them let say a 5% but the profit is 5% so I sell them at 1.05 million dollars and they charge them the VAT, so I should have 1.05 plus another 5% ((should have the calculation I don't know maybe that it's made the about 1.110,000 million dollars))). the problem
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