- October 31, 2019
- Posted by: Shuraa Tax Consultant
- Categories: Tax Registration, VAT - Value Added Tax in UAE
In the UAE, products and services supplies are subject to a tax known as the value added tax (VAT). According to Federal Tax Authority (FTA) regulations, companies with yearly revenues of more than AED 375,000 must register for VAT on mandatory basis.
FTA registration in the UAE refers to the process of obtaining a Tax Registration Number (TRN) from the Federal Tax Authority (FTA), which businesses and individuals require to conduct taxable activities in the country. The registration process is available online and failure to register can result in penalties and fines.
Due to this, firms operating in the UAE now need to register for VAT. Unfortunately, obtaining a VAT certificate in the UAE may be difficult and time-consuming. Here is where Shuraa Tax can be of assistance and provide VAT registration services in UAE. Here, we will talk about how Shuraa Tax may assist you with VAT registration in this blog.
Documents Required for VAT Registration in UAE
Businesses must provide all the necessary documentation for VAT Registration in UAE to get the Tax Registration Number (TRN). To register online for VAT registration, business entities need the following documentation:
- Trade License copy that is valid;
- Owner’s and manager’s valid passport copies;
- Owner’s and manager’s valid Emirates ID;
- Company contacts information. (P.O. Box and full address, including building & neighborhood);
- Memorandum of Association (MOA) — optional for single-entity establishments (mainland);
- Contact information for the individual who is representative. (Cell phone number, title, and email address);
- Bank information for the business. (The bank account must belong to the business;) Turnover statement over the previous 12 months and from Jan 2017 (printed on the company’s letterhead, with the owner’s signature and stamp);
- Anticipated earnings and expenses for upcoming 30 days Does the company work with the customs office? If so, provide a customs letter and customs code assigned to the Company.
Then, the Federal Tax Authorities (FTA) will receive all the paperwork needed for VAT registration through an online approach. After submitting an online VAT registration application in the UAE, it will take the FTA between twenty working days to assess the application and provide the Tax Registration Number (TRN). In case the FTA needs additional information, there is a provision to extend the timeframe.
How to Register for VAT in UAE?
Here are the detailed steps to obtain VAT registration in UAE:
Determine Your VAT Obligation:
Identifying if you need to register for VAT in the UAE is the first step. As previously stated, you must register for VAT if your taxable supply and imports exceeded the necessary registration level of AED 375,000 in the preceding 12 months or if you anticipate that they will do so in the upcoming 30 days.
Create an e-Services Account:
You must register for an e-Services account on the Federal Tax Authority (FTA) website in order to register for VAT in the United Arab Emirates. Your entire name, email address, and phone number are among the personal information you must submit.
Fill out the VAT Registration Form:
Log into your account after creating an e-Services account, then choose the VAT Registration option. Fill out the online VAT registration form. You will require information such as your company name, trade license number, contact information, and bank account information, etc.
Provide Required Documents:
Together with your VAT registration form, you will also need to submit some supporting documentation. Your trade license, a copy of the owner’s passport, and bank statements are a few examples of these papers.
Submit Your Application:
Submit your application after completing the registration form, supplying the necessary paperwork, and paying VAT registration UAE fees. If everything is in order after the FTA reviews your application and supporting documentation, your registration will be granted.
Receive Your VAT Registration Certificate:
Your certificate of VAT registration will be sent to you after your application has been approved. This certificate will provide your VAT number, registration start date, and VAT return filing period and first return filing deadline.
Because the VAT registration procedure might take many weeks, you should apply as soon as you can to prevent any penalties or fines. Also, it is advisable to seek expert guidance if you have any lingering concerns or questions concerning the VAT registration in Dubai.
How to Pay VAT in UAE?
To pay VAT in the UAE, you need to follow these steps:
Calculate Your VAT Liability:
Calculate your VAT liability as a first step. To accomplish this, sum up the VAT you charged for your taxable supply and subtract the VAT you paid for your business costs and purchases.
Submit Your VAT Return:
You must file your VAT return after determining your VAT responsibility. With the FTA’s e-Services platform, you may submit your VAT return online. Details such your VAT registration number, taxable supplies, input VAT, and output VAT must be included.
Make Your VAT Payment:
You must make your VAT payment after submitting your VAT return. With the FTA’s e-Services platform, you may pay your VAT online, or you can go to one of the UAE’s accredited banks to do so. Your VAT registration number and the required payment amount must be provided.
It’s crucial to remember that in the UAE, VAT returns and payments are due every three months. After the conclusion of each tax period, you have 28 days to file your VAT return and pay your VAT bill. You risk fines and penalties if you don’t file your VAT return or pay your VAT liability on time. Hence, it’s crucial to make sure you adhere to all VAT requirements in the UAE.
Eligibility for VAT Registration in UAE
In the UAE, a company’s ability to register for VAT is determined by the amount of taxable supplies it makes. Standard-rated supplies, zero-rated supplies, received reverse charges, and imported items are all examples of taxable supplies.
Mandatory Registration
If a company’s total value of taxable imports and supplies inside the UAE reaches the statutory registration level of AED 375,000 within the preceding 12 months or within the next 30 days, then the company must register for VAT. This indicates that once a company reaches this threshold, it must register for VAT; otherwise, penalties may apply.
Voluntary Registration
If a company’s total value of taxable imports and supplies inside the UAE surpasses the voluntary registration level of AED 187,500 within the past 12 months or during the next 30 days, it may elect to register for VAT voluntarily.
If a company’s vatable costs surpass the voluntary registration level, it may also decide to register voluntarily. This implies that even if a company does not exceed the level required for registration, it may still opt to register for VAT voluntarily. This may have certain advantages, such as the ability to deduct or reclaim input VAT.
Non-resident Registration
Regardless of the aforementioned thresholds, non-resident companies that make taxable supplies in the UAE are required to register for VAT. This implies that regardless of the amount of their taxable supply, a non-resident firm that offers taxable products or services to non-VAT registrant in the UAE, must register for VAT.
Tax Group Registration for VAT in UAE
Related businesses can register for tax reasons as a single VAT entity in the UAE through tax group registration. One firm serves as the representative member under this registration, while the other companies are regarded as the group members.
The following requirements must be satisfied in order to qualify for Tax Group registration in the UAE:
Related Companies:
Businesses must be tied to one another, where they share economic, financial, and organizational ties either in law, shareholding or voting rights or by control. It can be the same person or group of people holding at least 50% of each. This might take the form of direct or indirect ownership of shares.
UAE Establishment:
Every company in the group must have a physical presence in the UAE and be VAT-registered in the UAE. Members must be legal person not natural person.
Same Financial Year:
The financial year for each company in the group must be the same. This implies that each company in the group must have the same financial year-end dates.
Consistent Accounting System:
A uniform accounting system must be used by all the group’s businesses. They must thus employ the same accounting procedures and tools.
UAE VAT executive regulations
A series of regulations and instructions known as the UAE VAT Executive Regulations provide comprehensive instructions on how to carry out the UAE VAT law. The Federal Tax Authority (FTA) published the regulations, and they offer clarification on a number of crucial issues relating to VAT in the United Arab Emirates.
The laws cover a wide variety of concerns, including VAT registration, VAT rates, required invoicing, required VAT reports, and record keeping. Let us examine some of the main clauses of the UAE VAT Executive Regulations in more detail.
VAT Registration:
The Executive Regulations offer comprehensive instructions on the VAT registration procedure, which also includes the registration threshold, the necessary paperwork, and the registration deadlines. Companies must therefore register for VAT if their annual taxable revenue exceeds AED 375,000.
VAT Rates:
The Executive Regulations offer instructions on the applicable UAE VAT rates. The standard VAT rate as of right now is 5%. However certain items and services could have a zero rate or be free from VAT. The categories of products and services that are subject to various VAT rates are specifically described in the Executive Regulations.
Invoicing Requirements:
The Executive Rules offer comprehensive instructions on the VAT invoicing obligations. A tax invoice, for instance, must be issued by enterprises for all taxable supplies supplied, and it must adhere to certain criteria.
VAT Returns:
The Executive Regulations offer instructions on how to file a VAT return. Companies must submit VAT returns regularly, therefore, the regulations specify the information that must be included in the forms and the frequency and dates for filing.
Record Keeping:
The Executive Regulations also include instructions on the VAT record-keeping needs. Companies need to keep specified VAT-related records, such as invoices, receipts, and accounting records. The regulations include specific instructions on the kinds of documents that must be kept along with how long they must be kept in compliance.
In conclusion, the UAE VAT Executive Regulations offer thorough instructions on how VAT will be applied in the UAE.
Conclusion
In conclusion, VAT registration is a critical procedure that all companies in the UAE must mandatorily register for if their annual revenue surpasses a specific level. By using Shuraa Tax for VAT registration, you may prevent costly errors, save time and money, as well as enjoy peace of mind. Contact Shuraa right now if you are seeking for a trustworthy and knowledgeable group of tax professionals to assist you with VAT registration. Contact us via phone or text at +971 508912062 and +971 508912403, or by email at info@shuraatax.com.
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