VAT Registration in UAE

VAT Registration in Dubai, UAE

VAT (Value Added Tax) is the tax that is levied on the consumption of goods and services. VAT is one of the major indirect tax which is used around the world economies. VAT is also called consumption tax as the final brunt of the tax falls on the ultimate consumer who purchases or uses the goods and services. The tax is collected, managed, and accounted for by the businesses on behalf of the government.

The value-added tax was introduced in the United Arab Emirates (UAE) on 1st January 2018. The rate of VAT is set up at 5%. The introduction of VAT in the UAE is going to act as a new source of income for the economy which will help the country to utilize more funds for the development of the facilities for the citizens of the 4d.

With the introduction of VAT in the UAE, various laws and procedures for the easy facilitation and management of the VAT were introduced. The Federal Tax Authority is the governing body for all tax-related matters. The businesses will collect tax from the customers and make the payment to the government in form of VAT returns and the government will make the refunds for the VAT paid to the suppliers by the businesses.

Every business whose taxable supplies and imports exceed AED 375,000 per annum is mandatorily required to get their business registered for VAT. The Federal Tax Authority provides the choice to the businesses whose taxable supplies exceed AED 187,500 whether to register themselves or not.

VAT registration in UAE is an online process that is accessible within the Federal Tax Authority’s online portal. Before proceeding with VAT registration, the applicant should decide whether to register as a voluntary option or mandatory option, as a tax group or a standalone, etc.

Documents and Information Required for VAT Registration in the UAE:

Before applying for VAT Registration, a few documents are required, along with the soft copies which should also be uploaded along with the application.

  • Documents identifying the authorized signatory e.g. passport copy, Emirates ID
  • Trade license copy of the company
  • Certificate of incorporation, articles of association, power of attorney, etc.
  • Description of business activities
  • Turnover for the last 12 months in AED
  • Supporting document for 12-month sales
  • Expected turnover in next 30 days
  • The estimated value of imports for one year from each GCC countries
  • The estimated value of exports for one year to each GCC countries
  • If you expect to deal with GCC suppliers or customers
  • Supporting documents for customs registration in each emirate if applicable.
  • Bank Account Details

All the businesses that have/wish to register for VAT will be able to complete all the required procedures on the official website of FTA. All the legal documents (Trade License, MOA, AOA, etc.) that are existent of the legal entity should be uploaded to the website along with all the required identities such as the Passport, Emirates ID, etc. Apart from the legal documents and identity proofs, the annual turnover for the past 12 months needs to be submitted with the FTA in order to establish your eligibility for the registration of VAT.

After all the required documents are uploaded on the official website of FTA, the FTA either approves, rejects, or sends back your request for resubmission to make the highlighted changes in the registration. When the application is approved, the FTA issues a TRN number to the business. TRN is a unique number for each business that should be used by the businesses thereafter. The VAT registration certificate could be downloaded from the FTA website for the reference of the business and as proof that the business has successfully registered itself for VAT.

ARC Associates in Dubai have handled the VAT registration of many businesses for Abu Dhabi, Sharjah, and all over in UAE. For more details regarding the registration for VAT and getting your business registered, get the best guidance and assistance at ARC Associates.