VAT Registration in Abu Dhabi

Value-Added Tax (VAT) is a consumption tax levied on the supply of goods and services within the United Arab Emirates (UAE). VAT registration in Abu Dhabi is a mandatory requirement for businesses that meet the specified threshold of taxable supplies. VAT registration allows a business to collect VAT on behalf of the government and to claim input tax credit on the VAT paid on their purchases. It is a crucial step for businesses operating in Abu Dhabi to comply with the tax laws and regulations of the UAE.

Failure to register for VAT or comply with the tax regulations can result in penalties and fines imposed by the authorities.

At Shuraa Tax, we provide all kinds of taxation services to businesses in the UAE, including VAT registration services in Abu Dhabi. Our team of experts can assist businesses in understanding the VAT requirements, completing the registration process, and ensuring compliance with the tax laws.

What is VAT in Abu Dhabi?

VAT is a multi-stage tax applied at each stage of the supply chain. Businesses collect VAT from their customers and remit it to the Federal Tax Authority (FTA). The VAT rate in Abu Dhabi is currently 5%.

VAT Regulations in Abu Dhabi

The VAT regulations in Abu Dhabi are governed by Federal Decree-Law No. 8 of 2017. This law outlines the rules for VAT registration, the calculation of VAT, and the filing of VAT returns. All businesses with an annual taxable turnover exceeding AED 375,000 must register for VAT. If your company’s taxable turnover is between AED 187,500 and AED 375,000, VAT registration is optional but recommended for potential growth. Non-compliance with VAT regulations can lead to substantial fines and penalties.

Who Needs to Register for VAT in Abu Dhabi?

Outsourced accounting services in Dubai refer to delegating your business's accounting tasks to a professional firm instead of hiring an in-house accountant. These firms provide a range of services, allowing you to pick and choose what you need, from basic bookkeeping to tax compliance and financial reporting.

Who Needs to Register for VAT in Abu Dhabi?

Businesses operating in Abu Dhabi are generally required to register for VAT if their annual revenue exceeds a certain threshold. The specific criteria for VAT registration are as follows:

Mandatory Registration:

• Businesses whose taxable supplies and imports within the UAE exceeded AED 375,000 in the previous 12 months.
• Businesses that anticipate exceeding the AED 375,000 threshold in the next 30 days.

Voluntary Registration:

• Businesses whose taxable supplies and imports within the UAE exceed AED 187,500 but do not reach the mandatory threshold of AED 375,000.
• Businesses that have no taxable supplies or imports but have expenses exceeding AED 187,500.

The VAT registration in Abu Dhabi threshold is applicable to the total value of taxable supplies and imports, including any VAT collected. Foreign businesses making taxable supplies in the UAE are generally required to register for VAT, regardless of the value of their supplies.

Abu Dhabi VAT Registration Process

The VAT registration process in Abu Dhabi typically involves the following steps:

1. Eligibility Check

Ensure your business qualifies for mandatory or voluntary registration based on its taxable turnover.

2. Gather Necessary Documents

Prepare the required documents, which may include:

• Valid trade license
• Passport or Emirates ID of the authorized signatory
• Proof of authorization for the authorized signatory
• Contact information
• Bank account details
• Memorandum of Association (MOA) or Articles of Association (AOA)
• Financial statements (if applicable)

3. Create an e-Services Account

Visit the Federal Tax Authority (FTA) website (tax.gov.ae) . Create an e-Services account using your Emirates ID.

4. Submit the VAT Registration Application

• Log in to your e-Services account.
• Access the VAT registration application.
• Provide the required information and upload the necessary documents.

5. Await Approval

The FTA will review your application and notify you of the approval or rejection.

6. Receive VAT Certificate

Upon approval, you will receive a VAT registration certificate with your unique Tax Registration Number (TRN).

VAT Registration for New Companies in Abu Dhabi

New companies in Abu Dhabi are generally required to register for VAT once their annual turnover exceeds the registration threshold i.e. AED 375,000. The Abu Dhabi VAT registration process involves submitting necessary documents to the FTA and providing details about the business, its activities, and expected VAT liabilities.

Why VAT Registration is Crucial in Abu Dhabi

VAT registration is crucial for businesses operating in Abu Dhabi for several reasons:

1. Compliance with UAE tax laws

Failure to register for VAT can result in penalties and interest charges. A 1% daily penalty will be applied to the outstanding amount after one calendar month. This penalty will continue to accrue until it reaches a maximum of 300% of the original amount owed.

2. Business Credibility

VAT registration boosts your company’s reputation as a legitimate, compliant business.

3. Input tax credits

VAT-registered businesses can claim input tax credits for VAT paid on purchases to reduce their overall tax liability.

4. Access to government tenders

In some cases, VAT registration may be a requirement for participating in government tenders.

Why Choose Shuraa Tax?

With over 23+ years of experience, Shuraa Tax has an in-depth understanding of UAE tax regulations. We offer a range of VAT registration services in Abu Dhabi, including:

VAT Registration Assistance

Our experts can guide you through the entire VAT registration process.

VAT Return Filing

We ensure timely and accurate filing of VAT returns.

VAT Audits

We assist in preparing for and conducting VAT audits.

VAT Consultancy

Our team provides expert advice on VAT-related matters.

By choosing Shuraa Tax , you can rest assured that your VAT compliance needs in Abu Dhabi will be handled with the utmost professionalism and expertise.