Guide to VAT Registration in UAE

Businesses in UAE are required to comply with VAT regulations, hence it is advisable for taxable persons to seek the services of VAT Consultants in UAE to seamlessly register for VAT and to ensure compliance with the Federal Tax Authority’s regulations. 

VAT Registration in UAE

VAT registration in UAE refers to the process through which businesses register themselves with the Federal Tax Authority (FTA) to become eligible to charge and collect VAT on goods and services that fall under the VAT criteria. Upon VAT registration, Taxable Persons are required to fill out the VAT registration form on the FTA portal and to submit the required documents. After successful registration, Taxable Persons are required to submit VAT returns timely and maintain proper accounting books.

The registration ensures business owners to effectively run their businesses in the UAE, in compliance with VAT regulations. It also allows businesses to claim the input VAT paid on the purchase and expenses, hence assisting to recover incurred VAT.

Procedure for VAT Registration in the UAE

To register for VAT, Taxable Persons are required to have the relevant documents and financial transaction statements or invoices in place that are accurate. The step guide is explained below: 

  1. Registration criteria: The business needs to meet the registration threshold of AED 375,000 or 187,500 for voluntary registration for the previous 12 months.
  2. Acquiring requisite documents: Essentially, Taxable Persons are required to furnish relevant documents needed for VAT registration. For registration purposes, a trade license, a Memorandum of Association, an Article of Association, and authorized signatory proof, along with business activity turnover and shareholder details, must be presented.
  3. Account creation: The next step is to create an account on the FTA portal. All necessary information regarding the business and the trade license has to be provided in this step.
  4. Verification: The FTA will review the application and may ask for additional information. 
  5. VAT registration certificate: Once approved, you will receive the VAT registration certificate from the FTA mentioning your TRN (Tax Registration Number), which can be used in the invoices being issued by your business.

Read More: Understanding VAT In UAE: Should You Deregister?

The Requirement to Ensure Compliance and Record-keeping

Compliance with VAT regulations is essential for businesses that are registered for VAT, this includes: 

  1. Accurate records maintenance: Businesses must maintain accurate accounting records. All sales, purchases, expenses, and VAT-related transactions must be recorded and maintained throughout the year. The amount of VAT paid and charged must be clearly mentioned.
  2. Records retention: Businesses in the UAE are supposed to maintain their accounting records for at least five years. Proper record maintenance and retention ensure easy audits and compliance standards.
  3. Tax invoices: The tax invoices issued by your business must contain proper mention of the TRN number, goods and services, VAT collected, and the total amount received.
  4. VAT returns: The VAT returns must be filed on time by the businesses. The VAT return gives clear information about the VAT paid and the VAT received by a business. Late filing or non-payment of due taxes will result in a penalty from the FTA.
  5. VAT audits: Businesses are required to keep records well maintained and be ready for audits. Essentially, the records should be well maintained and accurate to keep the audit records secure.

The professionals at VAT Registration UAE assist Taxable Persons in ensuring compliance with the VAT regulation in UAE.