All taxable persons with a minimum turnover of AED 375,000 or above should register with the Federal Tax Authority. The tax registration number will be issued by the Federal Tax Authority.
The UAE is known for its attractive tax environment. The country continuing to levy a 0% income tax on personal incomes is quite attractive. The tax environment in UAE is quite attractive but it does not mean that UAE is tax-free. There is corporate tax and VAT which is payable to both individuals and businesses. The VAT tax rate is 5% on all goods and services outside of oil revenues. If you are eligible for VAT, then you must register for VAT. Keep reading for a simple VAT registration guide.
VAT Registration UAE
VAT registration in the UAE Is not compulsory for all, businesses. You must register for VAT in the UAE if your taxable imports and supplies exceed AED 375,000. For registering for VAT, the UAE Federal Tax Authority defines taxable supplies as:
‘A supply of services or goods made by business in the UAE that may be taxed at a rate of either 5% or 0% imports are also taken into account for this purpose, it a supply of such goods or services are taxable if made in the UAE.
In simple words, VAT is collected by businesses from their clients and paid to the government. Any VAT paid by a VAT-registered business to its suppliers can be reclaimed from the government.
How To Register For VAT In The UAE
The VAT registration process in the UAE is straightforward providing you to get expert advice beforehand.
The first step in the UAE registration process in the UAE is to create an account on the Federal Tax Authority website. This process is also straightforward. First, visit the government portal “eservices.tax.gov.ae” and choose ‘Sign Up.’
Next, fill in the required information and details such as email address, password, security question, etc. Once you have finished the steps, you will get a confirmation email to your registered email address explaining how to proceed.
VAT Registration UAE Requirements
Once you have signed into the FTA e-service portal, you should click ‘Register for VAT’ to get started. There are several VAT registration UAE documents required to complete your VAT registration application.
- Personal details
- Banking information
- Contact information
- Business Information
Once you complete the application, click on the submit button for Approval. When you are successfully registered for VAT, you will get a tax registration number (TRN). This is needed when submitting your VAT return. There is no VAT registration fee payable for using th
is registration service.
Deregistering For VAT
If you ever want to deregister for VAT, then it is also possible. It is important to know that before deregistering for VAT if you have voluntarily registered, you must stay registered for at least 12 months.
You should deregister for VAT if:
- The value of your taxable supplies falls below the voluntary threshold.
- Your company stops making taxable supplies.
How To Pay VAT In The UAE
When there is a need to submit a VAT return, you can also do this via the FTA eServices portal. To submit a return:
- Log in to eService and click the VAT tab.
- Complete the form including details of your income and VAT calculations.
- Submit your return.
- Make your VAT payment.
- UAE VAT executive regulations
To ensure businesses in the UAE fully understand the requirements for VAT registration, the Ministry of Finance has given the UAE VAT regulations. The requirements for Mandatory Registration are here:
- The mandatory registration threshold is AED 375,000.
- The person required to register for tax pursuant to the provisions of the decree-law must file a tax registration application within 30 days of being required to register.
- The authority will register for the VAT tax if the eligible person does not file for the VAT tax. The authority will also impose some penalties for not registering for VAT in accordance with Federal Law No. (7) of 2017 on tax procedures.
- The authority will register the person with effect from the first day of the month following the month in which the person is required to register.
- Whether or not the person notifies the authority that they are liable to register for tax, when a person anticipates that their supplies will exceed the Mandatory Registration Threshold in accordance with the decree-law within the next (30) days, the authority shall register them as of the date on which there are reasonable grounds to believe they will be required to register as specified in that clause, or as of such earlier date as the authority and the person have previously agreed upon.
- A taxable person who has been late in registering for tax according to the article provisions is liable to account for all taxable supplies and imports made by him registering.
How ebs can assist you?
If you are armed with the right knowledge, registering for VAT in the UAE doesn’t have to be overly complex. It does require a level of prior knowledge of the process. That’s why it is a good idea to work with a UAE company expert such as Business Incorporation Zone (BIZ) when doing so.
We are a team of professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life. Besides handling your VAT registration process, ebs can also assist with the formation of UAE free zone and mainland companies. the opening of corporate bank accounts, and advice on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, work permits, permissions, and visas application that is needed to trade in the UAE. Feel free to contact us and consult with us about your tax issues.