VAT (Value Added Tax) was introduced in the UAE on 1st January 2018. The VAT is the tax that is taxed on the consumption of goods and services. It is one of the major indirect tax which is used around the world economies. The rate of VAT is 5%. It is going to act as the new source of income for the economy of the nation which in turn utilize more funds the developments of the entire citizens of the country. With this introduction, various laws and procedures for the easy management of the VAT were also introduced. All the tax-related matters are governed by the Federal Tax Authority.
The businesses can collect tax from the consumers and create the payment to the govt. in the form of VAT returns. Therefore the government can create the refunds for the VAT paid to the traders by the companies. Each business whose taxable supplies and imports exceed AED 375,000 every year are forcibly required to get their business registered for VAT. The Federal Tax Authority provides the option to the companies whose taxable supplies exceed AED 187,500 whether to register themselves or not.
VAT registration in the UAE is an online process which is available within the Federal Tax Authorityâ€™s online portal. Before proceeding for VAT registration, the applicant should decide whether to register as a mandatory option or voluntary option or, as a standalone or a tax group etc.
Documents & information required for UAE VAT Registration process:
Copy of Trade License
Passport copy (Owner/partners)
Emirates ID (Owner/partners)
Power of attorney, certificate of incorporation, articles of association etc.
Description of business activities
Details Business Turnover for the last 12 months
Supporting document for 12-month sales
Projected revenues and expenses for the next 30 days
Estimated value of imports for 1 year from each GCC countries
Estimated value of exports for 1 year to each GCC countries
Names of GCC nations if doing business in them.
Associate documents for customs registration in each Emirates if applicable.
Companyâ€™s Bank Account Details
Steps for UAE VAT Registration Process:
Please keep the above-mentioned documents and information ready before you begin the UAE VAT registration process on portal.
Go to FTA Online Portal.
Sign up for a new account.
After successful sign-up, begin your registration process as guided on the FTA website.
Enter the appropriate details and apply.
On successful submission, TRN (Tax Registration Number) will be provided to the user.
The sign-up details will be used as login and password. A user needs to verify the email address and other information as and when required. Companies will be informed by email and SMS when TRN is generated. TRN is a unique number for each business which should be used by business later. The VAT registration certificate can be downloaded from the FTA website for the reference of the business and as evidence that the business has effectively registered themselves for VAT.
If you are new to setting up a business in the UAE, itâ€™s worth noting that you will be needed to register for VAT when your turnover exceeds the obligatory threshold of AED 375,000 at any point within the preceding twelve months. You have also a choice for voluntary registration if your business exceeds the voluntary threshold of AED 187,500 within the preceding twelve months. Businesses that fail to register on time are going to be charged with a late registration managerial penalty of AED 20,000 and extra penalties based on late filing and non-payment of previous VAT liabilities on a proportion basis That is why it’s essential to work with expert VAT professionals who will handle all of your VAT-related issues to wipe out confusions and avoid acquisition needless penalties. ARC Associates provides in-depth and tailored services to suit all of your necessities. For more information about the registration for VAT and getting your business registered, hire ARC Associates to get the best assistance for your VAT registration and other accounting issues.