VAT Registration Services in UAE

VAT Registration Services in UAE

Whether you own a small, medium, or established large business, you need to get registered for VAT in UAE under the Emirati VAT law. Registering your business under the UAE VAT law denotes that your business is recognized by the Government. VAT registration in UAE for your business entity will depend on the income generated from your business. Accounting and Bookkeeping Services LLC is one of the leading consultancies in UAE, which offers outstanding VAT registration services in Dubai addition to VAT deregistration, VAT accounting, VAT return filing, etc. 

UAE VAT Registration Online

If you are a business owner in UAE you need to get your business registered under the VAT law that has come on effect from 1st January 2018. Once a company is registered for VAT in Dubai, it must file VAT returns on a regular basis or as set by the authority.

VAT Registration is mandatory for companies and individuals doing businesses in the UAE if the annual turnover is more than AED 375,000/-.

The VAT registration processes in Dubai involve:

  • Register for VAT 
  • Charge VAT on the invoices issued to the clienteles
  • Announce the VAT to the Federal tax authorities through a VAT filing

Documents Required for VAT Registration in Dubai

  • Passport copy or Emirates ID to prove the identity of the authorized party 
  • Trade license copy of the company
  • Certificate of Incorporation of the company
  • Certificate of Articles of Association of the company
  • Certificate of Power of Attorney of the company
  • Description of business activities
  • Turnover for the last 12 months in AED
  • Supporting document for 12-month sales
  • Expected turnover in the next 30 days
  • Estimated value of imports for one year from all GCC countries
  • Estimated value of exports for one year to all GCC countries
  • Your consent whether you deal with GCC suppliers or customers
  • Supporting documents for customs registration in the Emirates if applicable.
  • Details of Bank Account

VAT Registration Processes

Basically, a business can opt for any of the two types of VAT registration in UAE:

1. Mandatory Registration

It is mandatory that a business must register for VAT:

  • If the total value of its taxable supplies and imports exceeds the required registration threshold over the previous 12 months
  • If the business expects that the total value of its taxable supplies and imports will exceed the obligatory registration threshold in the next 30 days.

The threshold for mandatory registration of a business is AED 375,000. But this threshold is not applicable to foreign organizations.

2. Voluntary Registration

A company may opt for Voluntary Registration:

  • If it does not meet the mandatory registration criteria,
  • If the total value of its taxable supplies and imports or taxable expenses in the preceding 12 months surpasses the voluntary registration threshold,
  • If the business foresees that the total value of its taxable supplies and imports or taxable expenses will exceed the voluntary registration threshold in the next 30 days.

The threshold for voluntary registration of a company is AED 187,500.

Calculating the Tax Registration Threshold

As per the Federal Decree-Law No. (8) of 2017 on Value Added Tax, to determine whether a person has exceeded the Mandatory Registration Threshold and the Voluntary Registration Threshold, the following details will be considered:

  • The value of Taxable Goods and Services
  • The value of Concerned Goods and Concerned Services received by the Person 
  • The value of the whole or relevant part of Taxable Supplies that belong to said Person if he has, wholly or partly, acquired a business from another person who made the supplies.
  • The value of Taxable Supplies made by related parties in accordance with the cases stated in the Executive Regulation of this Decree-Law.

VAT Registration as a Group

Two or more persons running businesses may apply for Tax Registration as a Tax group in UAE based on the following conditions: -

  • Each person shall have a Place of Establishment or Fixed Establishment in the State.
  • The relevant persons shall be Related Parties.
  • One or more persons conducting business in a partnership shall control the others.
  • If Related Parties do not apply for Tax Registration as a Tax Group, the Authority may assess their relationship based on their economic, financial and regulatory practices in business and register them as a Tax Group if their relation was proved thereto according to the controls and Conditions specified by the Executive Regulation.

VAT- exempt sectors

The following categories of supplies will be exempt from VAT:

  • The supply of some financial services that explained in VAT legislation
  • Residential properties
  • Bare land
  • Local passenger transport

How to Register for VAT in UAE

The registration for VAT in UAE is an online process that can be done through the VAT registration portal available on the website of www.tax.gov.ae. 

Once the application is submitted, the FTA will review the information and documents submitted and approve the application if everything has met the requirements, and it will allow a Tax Registration Number (TRN).

Once the VAT registration process is over, the Ministry of Finance will issue a VAT certificate which is an official confirmation from the authority that the business is registered under the VAT Law in the UAE.

A VAT Certificate includes the following rudiments:

  • VAT Registration Number
  • Date of the VAT registration
  • Issue date
  • Address of the Registered entity
  • First VAT return period
  • VAT return due date
  • Start and end dates of tax periods

Penalty for Non-Registration under VAT

Any company that fails to finish the VAT registration process under the deadline set by the Federal Tax Authority or if the company fails to submit registration after crossing the manual threshold limit is liable to pay a fine of AED 20,000.

The Importance of VAT Registration 

Experts observe that the introduction of VAT in UAE will bring long-term benefits to the country's economy and business owners. The significant reasons why VAT registration in Dubai is considered important include:

  • It enhances the business profile
  • It avoids unnecessary penalties
  • It allows claiming VAT refunds
  • It widens the market possibilities

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