DEAR Systems is a fully functional VAT-compliant Inventory system. Designed to cater to all your accounting needs according to the legal conditions attributed to implementing VAT within the United Arab Emirates.

With Dear Systems, you are able to:

  • Create & send VAT-compliant invoices.
  • View business reports.
  • Generate VAT returns (in the format specified by the FTA).

and much more. Let’s get started by setting up the basic configuration of VAT in DEAR Systems.

Set Up in DEAR Systems: 

When you are initially setting up your organization to comply the countries VAT rules with DEAR, you will have to make the following changes within the Settings page. These unique changes which are made and are available only for account holders/Organisations within the UAE.


  • Let's start by Adding a New Organisation.
    • Navigate to the Organisation drop down and click on the Create new button.


    • Fill in the form Leaving the "Integrate with" field as "None"
    • Click on "ADD ORGANISATION"

                                                           



NOTE: Once the Location is set this option cannot be edited and Keep "Integrate With field" as "None".


  • Once the Account is set up configure the bellow settings within the new Account.
    •  Click on Settings Icon.
    • General settings.
    • Scroll down to Financial Settings.
    • If your Organisation is Vat registered, toggle the option to "Yes"
    • Enter TRN - Tax registration number (TRN - A unique 15-digit number provided to you by the FTA for tax purposes)
    • Define the reporting period.
    • Set the Lock Date.



  • Thereafter, navigate to Reference Books > Stock > Locations & Bins. 

 

 

                 


The Highlighted fields are only available for stores located in the UAE.

  • Define Location


NOTE: If the supplier is within the DESIGNATED ZONES then the Vat rule is not applied. Depending on the store location the Vat rule may vary. 


Once the settings are configured click Save.


You have successfully entered the VAT details related to your organization.



VAT RATES

After successfully setting up your tax information, below listed are different tax rates will be auto-populated while creating transactions.


Standard Rate [5%]
A VAT of 5% can be applied to transactions created in Dear Systems. Most of the transactions that occur in the UAE fall under this tax rate.


Zero Rate [0%]
A VAT of 0% can be applied to transactions created within the Designated Zones.


        What sectors are zero-rated?


  • The educational sectorThe medical sector
  • The real estate sector 
  • The local transport sector
  • Exports of goods and services to outside the GCC

        Zero-rated supplies include:

  • international and intra-GCC transport
  • Supplies for certain sea, air, and land means of transportation (such as aircraft and ships).
  • Supply of precious metals for investment (gold, silver, and platinum)
  • Newly constructed residential properties that are supplied for the first time within three years of their construction.
  • Supply of certain educational services and relevant goods and services.
  • Supply of certain health care services and associated goods and services.
  • Certain eatables (a standard list will be ratified across the GCC by the Financial and Economic Cooperation Committee) 
  • The oil sector and the oil and gas derivatives sector (at the discretion of each member state.             


Exempt
If any of the items are exempted from VAT, you can select them as exempt from VAT while creating transactions. You don’t need to create new tax rules for such transactions.

       

    Categories of supplies that will be exempt from VAT are:

  • The supply of certain financial services
  • Sale of bare land
  • Lease or sale of residential property 
  • Local transport


Out of Scope
For supplies of any of your items do not fall under the scope of VAT, then you can select this option while creating transactions for them.