The value added to products and services is taxed as consumption (VAT) at every stage of manufacturing or distribution. On January 1st, 2018, a standard rate of 5% VAT was implemented in the United Arab Emirates (UAE). Understanding the requirements and steps for registering for VAT is crucial if you run a business in the UAE. You will gain knowledge about the step-by-step processes for businesses to register for VAT through this article. VAT registration UAE has a team of tax consultants in the UAE who are fully updated with the latest VAT amendments and rules laid by the Federal Tax Authority. Let us understand the VAT registration process in detail.
A step-by-step guide to explain the VAT registration process for businesses in the UAE
The process for VAT registration is simple if you know the actual rules and regulations of the FTA. Prior to registering, you must first determine your eligibility and have all necessary paperwork on hand. Let’s examine the procedure in greater depth.
- Establish Your Eligibility: Not all companies are required to register for VAT in the UAE. If the combined value of your taxable imports and supplies in the last 12 months exceeded AED 375,000, or if you anticipate doing so in the next 30 days, your business must register for VAT. Registration is optional if your annual revenue is between AED 187,500 and AED 375,000. You do not need to register for VAT if your annual revenue is less than AED 187,500.
- Compile Required Documentation: Ensure you have all the required paperwork before beginning the registration procedure. Typically, these include:
- Copy of Trade License
- (For corporations) Certificate of Incorporation
- The business owner(s)’ Emirates ID and a copy of their passport
- Financial records
- Information on business activities and services offered Bank account information.
- Create an e-Services Account: On the Federal Tax Authority (FTA) website, you must create an e-Services account before registering for VAT. Using this account, you can manage your transactions, submissions, and communication with the FTA regarding VAT.
- Fill out the registration form: Once your e-Services account is created, log in and go to the VAT registration section to finish the form. In the VAT registration form, give precise and thorough details about your company’s operations, finances, and ownership. Take care to verify all the information before submitting.
- Application submission: You can submit the form when you’ve completed it and made sure all of the information you’ve provided is accurate. FTA will analyze your application and request more details and supporting documentation if necessary.
- Obtaining the TRN number and notifications: Once the FTA has approved the form, you get the Tax Registration Number (TRN) number and a confirmation notification from the FTA for your registration. The TRN number obtained from FTA is unique to your business and gives credibility to your business.
VAT consultants in the UAE can be approached for any help in respect to VAT registration for businesses in the UAE.
Examining the Status of your application for VAT registration through your VAT dashborad:
You can check the Status of your VAT registration application by selecting the Dashboard tab.
- Drafted indicates that the registration form has not yet been finished by the applicant or submitted;
- Pending indicates that FTA has received the registration form and is processing it;
- Issued signifies that FTA has issued you a Tax Identification Number (TIN) in response to your application to join a tax group or confirmation of your VAT exemption.
- Suspended indicates that FTA has suspended your registration for VAT,
- Approved your registration for a Tax group and issued you a TRN.
- Rejected indicates that FTA has rejected your registration;
- Approved indicates that FTA has approved your registration and that you have successfully registered for VAT.
Late registration consequences for VAT
An administrative fine of 10,000 AED will be imposed if the Taxable Person fails to submit a registration application within the time the Tax Law allows. Follow the steps below to verify the fines, pay the full amount, and finish the payment:
- Select the Dashboard tab and look under the VAT box for the “late registration penalty” amount. To complete the payment, click “Pay Now”.
- If you choose the “Pay Now” option, E-Dirham gateway will open and you can pay using your e-Dirham card or normal credit card.
Suppose you need assistance getting your business registered for VAT and want to know the important dates regarding VAT registration in the UAE. In that case, you are requested to consult the tax consultants in the UAE for help.
Important obligations for VAT-registered businesses in the UAE
The businesses registered for VAT are obliged for the following:
- File VAT Returns: If your business is a registered VAT entity, you must submit regular VAT returns to the FTA. Your taxable supplies, input tax (VAT you spent on purchases), and output tax (VAT you earned from clients) are all described in full in your VAT forms. Quarterly returns must be filed, and any outstanding VAT is also required.
- Keep accurate records: For VAT compliance, keeping accurate records is essential. Maintain thorough records of all transactions, invoices, receipts, and documentation about VAT for a minimum of five years. This makes sure that the audits go well and that you meet your VAT obligations.
- Be Aware of Deadlines: Keep up with the due dates for submitting returns and sending payments for VAT. Penalties and interest costs may be assessed for late submissions or payments. Set up reminders and notifications to ensure you fulfil all of your VAT-related duties on time.
Since VAT registered businesses must comply to the VAT obligations, you should always get in touch with the VAT consultants in Dubai to keep yourself updated with the same.
How can VAT registration UAE make your business more compliant with VAT laws set up by the FTA?
VAT laws and procedures are subject to change over time. It’s crucial to stay on top of any changes to the VAT laws in the UAE that can have an effect on your business. To stay informed, visit the FTA’s official website frequently, attend workshops, and sign up for pertinent mailings. Professionals at VAT Registration UAE can help you with all VAT-related procedures for your business. Right from acquiring the necessary documents to getting your business registered and compliant for VAT, we are there to serve you. Get in touch with our team today and make your business VAT compliant.