There are documents required by the Federal Tax Authority (FTA) for the processing of VAT registration in UAE. All the information and documents required have to be complete when they are furnished to the tax authority so the registration for VAT goes without a hitch. Having the documents reviewed by experts prior to the submission can significantly reduce the duration of the registration process. It would also lessen the hassle most businesses experience when undergoing the complex process of VAT registration in UAE.
According to tax regulations in UAE, VAT registration has to be done by businesses if they reach the mandatory VAT registration threshold of Dh 375,000. Upon the approval of the application for UAE VAT registration, a registered business will be supplied with a unique tax registration number (TRN). The TRN will be shown in all VAT invoices.
Requirements of VAT Registration in UAE
- Registration certificate or certificate of incorporation;
- Trade license;
- Passport and visa or emirates ID of director/manager (copies);
- Partnership agreement, memorandum of association, or any document that provides business ownership information;
- Profile of appointed company director;
- Bank account details;
- Contact details;
- Physical office location;
- List of other partners or business directories in the UAE for the past five years
The Federal Tax Authority would also require for a declaration of the following:
- Estimated or actual financial transaction values;
- Applicant’s registered business activities;
- Details on the expected turnover of the business for the following thirty days;
- Turnover of the business for the past twelve months (supporting documents are needed);
- Details on the business’ expected exempt supplies;
- All information regarding the business’ imports and exports;
- Details on customs registration;
- The business’ activities in the GCC
A taxable person or VAT-registered business is also expected by the tax authority to keep the following documents/records:
- All tax invoices or any alternative document that is relevant to receiving goods or services;
- Tax credit notes, as well as any alternative document received by the business related to the purchase of goods or services;
- Records of taxable supplies received or made;
- Tax invoices and any alternative document that is issued related to goods or services;
- Tax credit notes, as well as any alternative document that is issued for goods or services;
- Records of goods or services disposed of or utilized by the business for matters that are not related to th4e business, as well as taxes paid for such;
- Record of imports and supplies of goods or products;
- Records of corrections or adjustments that are made to tax invoices or any account;
- Records of goods or products that are exported to any foreign country
Tax records have to be kept by a taxable person, which include the following information:
- Recoverable tax on imports or supplies;
- Recoverable tax after adjustment or error correction;
- Due tax after an adjustment or error correction;
- Due taxes on all taxable supplies
The application for VAT registration is lengthy and complex. A business has to be ready with the business and personal identification documents required by the tax authority. VAT registration can be divided into three different categories:
- Exempt from VAT Registration – a business that has taxable supplies that amount to less than Dh187,500 is not required to undergo VAT registration in UAE;
- Voluntary VAT Registration – a business that has taxable supplies between Dh187,500 and Dh375,000 can opt in on the registration process, but it isn’t obligated to.
- Mandatory VAT Registration – in the event that the review of the business is Dh375,000 or more, then it has the legal responsibility of undertaking the VAT registration process.
A misstep in the VAT registration process can result to rejection of the application, fines or penalties, or loss in valuable time of business owners. That being said, it is best to have professionals undergo the registration application for the business. With the help of experts, the business is able to register smoothly and without any interruption to the day-to-day operations. Call us today to schedule a consultation with regulated tax agents in Dubai.
Should all businesses register for VAT or not?
VAT-registered businesses can add Value Added Tax to sales of goods and/or services whenever they sell to consumers or clients. As taxable persons, they are able to reclaim VAT paid for purchases for goods or services. Business that have not registered can’t reclaim VAT paid on purchases made for the businesses.
What are the products that are considered as VAT exempt?
VAT exempt items in UAE include financial services, residential buildings and leases that are more than six months, bare land, and transportation services for local passengers.
What is a zero-rated supply?
A zero-rate item is a good or product on which the tax authority charges VAT but the current rate has been set to zero. A good that is under this classification may be a healthcare service, education services, or indirect export.