The United Arab Emirates is a center for several industries, favorable for business owners to establish and operate in. Therefore, our VAT experts wrote this article to assist taxable persons to understand how to register for VAT in the UAE for a new company.
VAT registration is necessary for new companies in the UAE that meet certain turnover thresholds set by the Federal Tax Authority. And it is a process by which companies are legally required to register with the in order to comply with the tax laws of the United Arab Emirates.
However, if you already setup a company and you don’t know if you’re a taxable person or not. We highly recommend you to read this article first [VAT Registration Threshold: Minimum Registration Requirement], then get back to read this guide.
However the next paragraph will explain how to know if your new company is subjected to VAT registration.
VAT Registration UAE Eligibility For a New Company
New Companies are subjected to VAT registration if the value of the taxable supplies exceeded AED 375,000 in the previous 12 months. or, if the company expects that the taxable supplies will exceed this threshold in the next 30 days.
Once the company exceeded the taxable supplies threshold, it must be registered to VAT within 20 working days, otherwise the company may be subjected to fines and penalties.
Moreover, even the taxable supplies didn’t exceed the said above threshold, the company still have the voluntary registration threshold, which of AED 187,500 and it’s a threshold for companies that do not meet the mandatory registration criteria, but still wish to get the benefits of voluntary registration . Contact us to learn more about this.
How to Register for VAT in the UAE for a New Company
Step 1: Preparing The Required Documents
- Trade Licinse
- Passport copies of the business owner(s) and partners
- Emirates ID copies of the business owner(s) and partners
- A document proving the business location’s address
- Recent three-month bank statements
- Financial statements for the previous year
- Copies of invoices and purchase records
- Descriptions of the business’s affairs and the goods and services it offers
- A copy of the lease for the company’s premises (if applicable)
- A power of attorney (if applicable)
Step 2: Create an e-Services Account
The next thing to do is to create an account on EmaraTax portal [Click here to start] after collecting all the necessary documentation. This account will later be used as a portal for accessing various VAT-related services as well as for submitting the application for VAT registration. To minimize potential problems or delays, it is necessary to give complete and up-to-date information when creating an account.
Step 3: Fill in the VAT Registration Form
The company can fill out the VAT registration form by logging into their e-Services account. It is important to avoid making mistakes throughout the registration process, such as giving inaccurate or insufficient information, as doing so may cause delays or even the rejection of application. Additionally, it is essential that the additional documents submitted by the company are in the required format as per FTA regulations.
Step 4: Submit the Application
After the form has been completed, submit it using the e-Services account. The application submitted will then be reviewed by the FTA.
Step 5: FTA Review and Approval
After submission, the FTA will carefully examine the application to make sure it complies with all rules and regulations. The FTA may contact the company for more details if any additional details or clarification are required. The FTA will supply them with a VAT registration certificate as soon as the application is approved. This certificate demonstrates that the company has satisfied all requirements and has been registered for VAT.
Step 6: Get a Tax Registration Number (TRN)
After obtaining the VAT registration certificate, the company should obtain a Tax Registration Number (TRN). This number is required for filing VAT returns and manage business transactions. To facilitate effective communication between businesses and tax authorities and to avoid the risk of penalties, it is advised to include the TRN on all invoices and official documents.
Step 7: Start Charging and Collecting VAT
After obtaining a Tax Registration Number (TRN), the new company should begin charging and collecting Value Added Tax. By doing so, VAT contributes as an important source of funding for the UAE government. To accurately calculate and collect VAT from their consumers, the company must have a thorough understanding of the VAT rates and regulations that apply to their business operations. By carefully charging and collecting VAT, they can ensure compliance to VAT laws and supports the UAE’s economic growth and development.
You can always consult UAE tax experts for further clarification regarding the documents and additional requirements for VAT registration in the UAE.
Vat registration in UAE for a New Company fee and time estimation
The registration procedure for VAT for a new company in the UAE is free of charge, and it takes only 45 minutes. However, it would help if you determine your eligibility and then apply for VAT registration. If you do not fall into the mandatory category and apply for VAT registration, then you must be aware that you must follow the FTA’s rules and regulations. You must keep records of your financial transactions and issue tax invoices per the FTA guidelines.
Typically, the FTA estimates that it will take 20 business days from the date it received the completed application to process the application. However, FTA may require more time to process the application if any extra information is required. The applicant must update their application and supply the new details. The FTA’s response to the amended application might take an additional 20 business days. The application will be automatically denied if it is not resubmitted within 60 calendar days of the day you got the FTA notification.
Therefore, you must seek the opinion of VAT experts in the UAE before registering your new company for VAT in the UAE.
Seek the expert services of VAT Registration UAE
To effectively ensure VAT compliance and seamlessly navigate through the process of VAT registration in the UAE, new companies are advised to avail the expert services of VAT Registration UAE. Thus, contact us today and we shall be glad to assist you.
The tax consultants at VAT Registration UAE are experienced and well-updated with the latest rules and regulations of the FTA. They assist businesses to seamlessly registered for VAT in compliance with the statutory law. Thus, contact our tax expert team and we shall be glad to assist you.