Essentially, when registering for VAT in the UAE, all taxable persons ought to fully comply to VAT regulations and standards, to which noncompliance accrues hefty fines and penalties.
This article seeks to furnish a clear guide of the UAE VAT registration process. UAE top tax agents confer expert guide on the list of required documents, the scope of qualifying for VAT registration and the probable costs.
Essential Requisites For VAT Registration
To apply for VAT registration uae, the taxable entity has to meet the Federal Tax Authority’s standards.
The requistes include, having an annual turnover of 375,000 AED or more and providing goods/services in the UAE.
The required documents include a valid passport or an Emirates ID, a copy of the business’s Trade License, Memorandum of Association and Articles of Incorporation.
The aforementioned documents have to be furnished along with the application form, which can be filled out online on the Federal Tax Authority’s website.
Once the application is submitted, the applicant receives a confirmation number, which can be used to track the application’s status.
The cost of the registration varies on the company’s size and turnover. The Federal Tax Authority has set a threshold of 15,000 AED for companies with a turnover of less than 1.5 million AED.
Companies that have a higher turnover ought to pay a fee based on the value of their turnover.
Respectively, this fee is determined by the FTA and can vary from company to company.
Once an application is submitted, it can take a couple of weeks for the FTA to approve your company’s VAT registration.
The Scope Of VAT Registration In UAE
Once a business has been registered for Value Added Tax (VAT) in the United Arab Emirates (UAE), it must comply with certain obligations.
Corporations ought to collect and submit value added tax (VAT) returns to the Federal Tax Authority (FTA).
The FTA will assess the returns and determine the amount of VAT due or to be refunded.
VAT registration procedure in UA involves completing an online registration form and submitting the required documents.
The FTA will review the application and provide a tax registration number if approved.
Once registered, all businesses must maintain a full record of their business activities that affect VAT and submit tax returns regularly.
The following items should be taken into account when doing company registration for VAT in UAE:
• Business and corporate structure – This should include company name, address, contact details and other information related to the business.
• Accounting systems – Businesses must maintain accurate records of their business activities and the VAT due on them.
• Tax registrations – Companies must register for VAT with the FTA and obtain a tax registration number.
• Tax returns – Businesses must submit regular tax returns to the FTA and pay any taxes due.
• Tax compliance – Companies must comply with all rules, regulations and requirements of the Federal Tax Authority.
How To Apply For VAT Registration In UAE:
The process of registering for a Value Added Tax (VAT) in the UAE is straightforward.
All companies need to apply for VAT registration, compliant to VAT regulations and standards. Below is a step-by-step guide for VAT registration.
Step 1: Gather Necessary Details
To apply for a VAT registration, there are certain required documents such as the company’s name, address, contact details, and tax return information.
Step 2: Submit VAT Registration Application
Submit the required documentation to the Federal Tax Authority (FTA) either online or through their offices.
When submitting the application, a valid Emirates ID and a valid passport of the contact person listed on the application has to be provided.
Step 3: Receive VAT Registration Number
Once the FTA approves the application, the applicant receives a VAT registration number. The registration number has to be used for future filings and transactions related to the Value Added Tax in the UAE.
Step 4: File VAT Returns
After receiving a registration number, the registered person ought to file periodic returns with the FTA.
These returns should include any sales and purchases made during the period, as well as any VAT due or refundable.
VAT Turnover Calculation For Registration In UAE
The FTA requires businesses to calculate their turnover for VAT registration purposes.
The registration is based on the business’s turnover or their expected turnover in the next 12 months. To determine their turnover, businesses must use the following formula:
Turnover = Total Value of Sales + Other Income – VAT Refunds
The other income includes any money made from renting or leasing property, services and assets.
The VAT refunds are amounts of VAT paid by a business that were later refunded by the tax authority.
Businesses must also keep in mind that the turnover calculation is based on the currency that they use to conduct their business.
For example, if a business trades in both AED and USD, its turnover calculation must be based on the currency used in a majority of its transactions.
It is important to note that all businesses must update their turnover calculation every six months and register for VAT if their turnover exceeds the registration threshold.
The Federal Tax Authority considers a business’s turnover as it existed six months prior to the date of applying for registration.
Avail The Services Of Top Tax Agents In The UAE
It is imperative for all taxable persons to avail the services of accredited and reputable tax agents in the UAE to seamlessly undertake UAE VAT registration and to stay compliant to the Federal Tax Authority’s regulations and standards.
