The implementation of Value Added Tax (VAT) in the UAE saw businesses coming forward to register for the same. Individuals or businesses which meet the threshold limit i.e., earning an annual turnover of AED 375,000 or more (mandatory) and AED 187,500 or more (voluntary), must register for VAT UAE to conduct business in any of the emirates.
It’s designed to make it accessible for all and hence, can be registered online through the Federal Tax Authority’s (FTA) portal ( https://eservices.tax.gov.ae/en-us/ ).
VAT registration came into effect in January 2018 with an objective to diversify the country’s resources and as a result, entrepreneurs have become more compliant & cautious when it comes to tax obligations.
Failure to do so will lead to the organization or business being prone to incurring penalties for late VAT registration UAE. To avoid such circumstances, we have put together the necessary steps, information, documents, etc. regarding Federal Tax Authority VAT registration, especially for startups and SMEs.
Who should register for VAT?
- ● If imports and taxable supplies of your business exceed the threshold limit of AED 375,000 in the previous one year, your business falls under the Mandatory VAT Registration tag. Mandatory VAT registration applies to your business if it could probably pass the limit of AED 375,000 in the next 30 days.
- ● If the value of your taxable expenses and supplies exceeded AED 187,500 in the last one year, your business is accountable for Voluntary VAT Registration. If your yearly revenue is below AED 375,000 and above AED 187,500, VAT registration is optional and voluntary.VAT for Free Zone Companies in UAE Companies operating in Designated Zones (nominated free zones which are eligible for special VAT treatment with certain limitations) will have to register for VAT.
The guidelines for VAT for the supply of goods will be subject to certain strict criteria and those companies must follow a detailed record keeping. For those involved in the supply of services, usual UAE VAT rules are applicable.
Documents required for VAT registration VAT consultants in Dubai, we guide our clients to prepare the necessary documents required for successfully registering their business on the online portal. For reference and for a better clarity, take a look at the below list:
- Trade license
- Registration certificate of the company or Certificate of Incorporation
- Document showing ownership data about the business – Article of Association orPartnership
- Passport copy and the Manager’s Emirates ID
- Location of the business’s physical office
- Profile of the manager
- Bank account details
- Contact details
- Turnover declaration for the last one year
- Details about custom registration
- GCC activities of the business
- Declaration stating business activities
- Expected expenses & revenue for the next 30 days after receiving Tax RegistrationNumber (TRN)
Keep all the necessary personal & business identification documents with their scanned copies ready to begin the registration process. It takes two to three weeks for the FTA to issue a TRN after reviewing the VAT registration application.
VAT registration as a Tax Group
A group of two or more individuals engaged in a business who fulfills the conditions set by the UAE VAT law registers the group as a single taxable person in the free trade zone can be categorized as a Tax Group. What are the benefits of registering for VAT as a tax group?
- ● All entities in this group will have one Tax Registration Number (TRN) which simplifies accounting and helps with the preparation & reporting compliance reports like VAT returns.
- ● Supplies between the VAT group will not incur any VAT but those goods provided by this group to a third party are subject to VAT.What are taxable supplies?Supply of goods or services for conducting business in the state are called taxable supplies. Taxes in UAE is a standard rate at 5%. Below are the types of supply in VAT
- Domestic Taxable Supplies
- Reverse Charge Supplies
- Zero-rated supplies
- Exempt Supplies
- Intra-GCC Supplies – B2B
- Intra-GCC Supplies – B2C Â
Get in touch with us
Worried about how to pay VAT in UAE and how to get TRN number in UAE? Worry not, get in touch with us and forget the rest. Our team of tax professionals and accountants will help you get past the procedure successfully by complying with the law and by maintaining bookkeeping. Give us a call or drop a message and our executive will get in touch with you shortly.