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Alternative Methods of Input Tax Apportionment and Considerations for Banks

Alternative Methods of Input Tax Apportionment and Considerations for Banks:

The Outputs-Based Method: This method is applicable to insurance companies and financial institutions, such as banks offering banking services. This applies to individuals, companies, large establishments, investment banks, providers of local passenger transportation services, educational institutions, art galleries, cultural entities, and similar establishments engaged in non-business activities.

The Transaction Count Method: Financial institutions, including banks providing banking services to companies, large establishments, investment banks, and similar institutions, can use this method.

The Sectoral Method: Large and complex companies and establishments with various divisions, such as banks with retail, investment, and real estate divisions, insurance companies offering life and non-life insurance, and real estate companies with separate commercial and residential property divisions, are expected to employ sectoral methods.

Banks that meet the eligibility criteria can assess their operations and seek approval from the Federal Tax Authority (FTA) to apply the most suitable special input tax apportionment method for their circumstances.

For understanding more about VAT Updates, Tax Law and Registration reach out to us on : ✉ contact@itc-tax.com | 📞 +971 523205619

This article was published on  16 July 2023

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