A Step-by-Step Guide to Register for VAT in the UAE
Value Added Tax (VAT) was imposed by the United Arab Emirates (UAE) in 2018, which has an effect on companies doing business there. Knowing the steps involved in the VAT registration procedure in UAE is essential for maintaining compliance with UAE tax authorities, regardless of experience level or inexperience as a business facing the new laws. This detailed guide goes into great detail to make sense of every step and provide you the knowledge you need to ensure an easy registration process.
Read More about VAT : VAT in the UAE: A Comprehensive Guide for Businesses
1.Your Registration Status: Mandatory and Optional Registration
Identifying whether your company is subject to mandatory or optional VAT registration is crucial before starting the registration process:
- Mandatory Registration: Companies whose taxable supplies and imports have exceeded AED 375,000 in the past 12 months or will continue to do so in the next 30 days are required to register for VAT. This covers all transactions subject to VAT under UAE laws, including imports and sales of goods and services within the country.
- Voluntary Registration: Companies are able to voluntarily register for VAT if their taxable imports and supply (or taxable expenses) have exceeded AED 187,500 in the previous 12 months. Although voluntary registration is not required, there are advantages to it, like the ability to claim input tax on incurred costs.
2. Compiling the Required Records: Make Sure You Have All the Data Required
After you’ve verified your registration status, it’s time to collect the application’s necessary documentation. The following is a comprehensive inventory of the paperwork needed to guarantee an easy processing of your application:
- Trade License: A copy of your current, Department of Economic Development (DED)-issued trade license. This document attests to the validity and existence of your company.
- Memorandum of Association (MOA) or Articles of Association (AOA): A copy of the legal document that describes the ownership, objectives, and structure of your organization.
- Passport Copies: Copies of each owner’s passport and those who are permitted to sign documents on the company’s behalf. For VAT purposes, these people will be listed as approved signatories.
- Financial Statements: Providing audited financial statements or management accounts for the previous year helps speed up the process even if it’s not always required, particularly for companies with complex financial arrangements.
- Tax Residency Certificate: In case that your business is not based in the United Arab Emirates, you may need to provide proof of your tax residency in another nation.
Proof of Address: A lease, an electricity bill, or ownership records are examples of documents that attest to the location of your company’s properties.
3. Choosing Your Registration Choice: Easy Online or In-Person Assistance
For VAT registration, the Federal Tax Authority (FTA) provides two practical options:
• Online Registration: the simplest and most convenient option, allowing you to sign up using the FTA’s easy-to-use eServices portal (https://eservices.tax.gov.ae/).
• In-person registration: Although less popular, you can physically submit your application by going to the FTA service facility that is closest to you. This could be a good choice if you need help or would rather receive in-person direction while doing this.
4. Getting Started with Online Registration: A Complete Overview
For a seamless online registration experience, follow these detailed steps:
- Visit the FTA eServices portal: Head to https://eservices.tax.gov.ae/ and access the platform.
- Create a User Account: Utilize your email address and a strong password to set up a user account. This will provide you with dedicated access to the portal and manage your VAT affairs online.
- Verify Your Email Address: Click the verification link sent to your email address to activate your account and gain full access to its features.
- Log in and Start Your Application: Once your account is verified, log in and select “Register for Tax Registration” from the available options.
- Choose the Registration Type: Select the appropriate registration type based on your situation. Options may include “New Taxpayer,” “Change in Details,” or others depending on your circumstances.
- Enter Business Details and Upload Documents: Carefully enter your business information and upload all the required documents mentioned in Section 2. Ensure the documents are scanned in a clear and readable format.
- Review and Submit Your Application: Thoroughly review the application details for accuracy and completeness before submitting it electronically.
- Await FTA Review and Notification: The FTA will review your application and notify you of the outcome within 20 business days. Expect an email notification or communication through the eServices portal regarding the decision.
5. Post-Registration Requirements:
Once your registration is approved, you’ll receive a Tax Registration Certificate (TRN) and be assigned a VAT group. Remember to:
- Charge and collect VAT on taxable supplies:For most supplies and services, the standard VAT rate in the UAE is 5%.
- File VAT returns: Submit regular VAT returns (usually quarterly) to the FTA, reporting your taxable supplies, expenses, and VAT liability.
- Pay VAT liabilities: Settle your VAT dues to the FTA within the specified deadlines.
Disclaimer: Above all information is for general reference only and sourced from internet, before making any kind of decision please visit the authorized websites of authorities and service providers.