Essential Documents for VAT Registration in the UAE
VAT (Value Added Tax) registration is mandatory for business entities in the UAE that exceed the compulsory or voluntary registration threshold. The FTA requires certain…
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VAT Registration UAE
It is important for businesses to register for VAT in the UAE. Value Added Tax (VAT) was introduced in the UAE on 1st January 2018. The rate of VAT is 5 per cent. VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. Businesses collect and account for the tax on behalf of the government. A business must register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000. Furthermore, a business may choose to register for VAT voluntarily where the total value of its taxable supplies and imports (or taxable expenses) is in excess of the voluntary registration threshold of AED 187,500.
VAT registration also has other advantages such as the ability to reclaim VAT they’ve paid on their business purchases (inputs), and it also increases the credibility of the business. It is therefore important for businesses to go through the necessary process of registering for VAT in the UAE to avoid fines and to be able to operate on an equal footing with other businesses in the market.
Why Select VAT Registration Services in UAE From Us
Are you looking for a company which offers dependable, efficient VAT registration services in the UAE? Look no further. Our VAT experts offer the following services related to VAT registration in the UAE for our clients. These include:
- Fast & Reliable Processing: We guarantee fast and accurate VAT registration to enable you to concentrate on business development without any delays.
- Affordable & Transparent Pricing: We offer our services at the best market prices with no additional costs. To make it easier for our clients, we provide straightforward, clear, disclosed rates for all services.
- Hassle-Free Documentation: Our VAT experts simplify the VAT registration process for you with our streamlined documentation services. We will prepare and submit the documents on your behalf to reduce your workload.
- Dedicated VAT Experts: Our skilled and experienced VAT experts will guide you through every step of the registration process. Take advantage of their experience and knowledge.
- Quick & Easy Online Registration: Make your VAT registration today through our easy-to-use online platform. It is a simple process which we have designed to make it easy for you.
- Expert Guidance & Compliance: Follow the best practices in UAE VAT regulations with the help of our expert advice. We will help you in solving the problems of VAT compliance.
- Assistance with VAT Returns & Filings: In addition to registration, we provide full-service VAT returns and filings support. This is to ensure that you remain VAT compliant throughout the year.
- Ongoing Support: We are committed to providing you with support services beyond registration. We are available to help you with any VAT-related concerns or challenges that may occur after registration.
Types of VAT Registration in UAE
In the UAE, Value Added Tax (VAT) is a type of consumption tax that is levied on most goods and services. It is important for every business to get registered for VAT where it generates income from business and has taxable transactions. Any business which exceeds mandatory or voluntary registration thresholds is required or may be able to register for VAT.
In the UAE, there are two kinds of VAT registrations: Mandatory Registration and Voluntary Registration. It is important for businesses to know these registration types in order to be in compliance with tax laws and thus avoid fines.
Mandatory Registration
A BUSINESS MUST REGISTER IF:
- The total value of its taxable supplies and imports exceeds the mandatory registration threshold over the previous 12 months, or
- The business anticipates that the total value of its taxable supplies and imports will exceed the mandatory registration threshold in the next 30 days.
- The mandatory registration threshold is AED 375,000. This threshold is not applicable to foreign businesses.
- A non-resident person, who supplies goods or services in the UAE, must register as a taxable person, without regard to the amount of revenue.
Important Points about Mandatory Registration
- Where a Person does not file his Tax Registration application despite being required to, the Authority shall register that Person with effect from the date on which the Person first became liable to be registered for Tax.
- The failure of the Taxable Person to submit a registration application within the timeframe specified in the Tax Law results in a fine of AED 10,000.
Voluntary Registration
A BUSINESS MAY APPLY TO REGISTER IF IT DOES NOT MEET THE MANDATORY REGISTRATION CRITERIA AND:
- The total value of its taxable supplies and imports or taxable expenses in the previous 12 months exceeds the voluntary registration threshold, or
- The business anticipates 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 voluntary registration threshold is AED 187,500.
Why Register Voluntarily?
- Claim VAT Refunds – Voluntarily registered businesses can recover VAT paid on expenses, which will help them to reduce their costs.
- Better Business Reputation – VAT registration is a proof of credibility to the customers and suppliers.
- Future Readiness –The businesses which are likely to grow in the future will not be required to register for VAT at the very last minute.
Conditions for Voluntary Registration
- The FTA may require the business to provide evidence of the business’s taxable sales or expenses.
- The business must have a physical presence in the UAE and be engaged in business activities.
Frequently Asked Questions (FAQs)
What is VAT?
VAT (Value Added Tax) is an indirect tax that is levied on a product or service at each stage of production, distribution and sale. The standard VAT rate in the UAE is 5%.
Who needs to register for VAT?
Businesses that manufacture taxable supplies in the UAE and are based in the country are required to register for VAT if the total value of their imports and taxable supplies over the previous 12 months exceeds or is expected to exceed the AED 375,000 mandatory registration level within the following 30 days. Regardless of the value of their imports and taxable supplies, non-resident companies that manufacture taxable supplies in the UAE are also required to register for VAT.
Why is VAT registration important?
n the UAE VAT Registration is mandatory. Failure to comply with the requirement may lead to heavy fines and legal consequences. It also assists businesses in following tax laws, submitting returns on time and issuing invoices which are VAT compliant. Proper VAT compliance also makes auditing easier and helps in avoiding penalties levied by the Federal Tax Authority (FTA).
Who is eligible for VAT registration in UAE?
Any person who makes or expects to make taxable supplies and imports that exceed the mandatory registration threshold of AED 375,000 in a year is eligible to register for VAT. Non-UAE based businesses, who supply taxable goods and services within the UAE have to register, regardless of the value. It is also possible for UAE-resident businesses who make taxable supplies in the UAE may voluntarily register for VAT if the value of their taxable supplies and imports exceeds the voluntary registration threshold of AED 187,500.
How much is the VAT registration fee in UAE?
There is no cost for VAT registration in the UAE. It is free of charge.
What is the process for VAT registration?
The process is completed by submitting an online application through the Federal Tax Authority’s (FTA) EmaraTax portal. The documents that are required are a valid trade license, proof of business activity, passport copies of the business owner(s), details of business income, and other supporting documents.
How long does VAT registration take?
The FTA usually processes VAT registration applications within 20 working days from the date the complete application is submitted.
Can I register for VAT online?
Yes, it is possible to register for VAT online through the FTA’s EmaraTax portal. It is necessary to create an account on the portal to register.
What documents are required for VAT registration?
Some of the documents that are required for VAT registration include:
- Valid trade license(s)
- Passport/Emirates ID of the authorized signatory(s)
- Proof of authorization for the authorized signatory(s)
- Contact information
- Bank letter validating the bank account details of the applicant
- Proof of Business Activity
- Details of Business Income
- Company’s Memorandum and Articles of Association
- Certificate of Incorporation (if applicable)
- Power of Attorney (if applicable)
- Other relevant documents depending on the basis on which you are registering.
What happens if you don’t register for VAT in UAE?
Non-compliance with VAT registration leads to penalties and fines from the FTA. Non-compliance can also affect business operations and may result in legal consequences.
How to calculate VAT in UAE?
VAT is charged at 5% on the taxable price of goods and services. For instance, if a product is priced at AED 100, the VAT on it would be AED 5, making the total amount AED 105.
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