VAT Registration

UAE has introduced VAT (Value Added Tax) in its framework from 1^st January 2018, the framework has changed a lot after the introduction of new tax laws, as UAE was tax free country so this is a big and bold step of UAE government to implement such a big change. Registration will be must if businesses cross the threshold limits.

January 1^st 2018 is one of the epic days in the history of UAE as VAT a new tax law which is indirect tax or also known as consumption tax is levied on the consumption of goods or services at the point of sale. So it is quite important for businesses to prepare themselves for registration under VAT in UAE. VAT has been introduced at a very low standard rate of 5% which will be applied on goods and services where consumers will be the ultimate bearer of the burden of tax. VAT is already implemented and actively working in more than 150 countries worldwide as a major commercial tax.

One should know when and how to get themselves registered under VAT as VAT is applied on most of the goods and services at each stage of the supply chain or we can say on the majority of dealings with some exemptions, where businesses will collect on the behalf of government according to the guidelines and they can also claim for the VAT Refund from the government accordingly.

Requirements for VAT Registration

The Federal Tax Authority (FTA) made an announcement regarding the registration for VAT in UAE, as every taxable person whose value of annual/yearly supplies, exports, imports surpasses or expected to surpass the threshold limit will be under obligation to register themselves under VAT.

There is a complete procedure and guidelines to register under VAT but the first thing first who all are required to register and when to register, according to FTA there are two major categories of threshold such as:

1. When value of annual/yearly supplies, exports, imports surpasses AED 375,000 there will be need of MANDATORY REGISTERATION
2. When value of annual/yearly supplies, exports, imports surpasses AED 187,500 there will be VOLUNTARY REGISTRATION.
3. Now the question is how to calculate threshold limit, so there is a method of calculating the same which is given below:
4. Total value of supplies made by a taxable person for the previous 12 months; or
5. Total value of supplies of the subsequent 30 days.

(No need to consider exempted supplies while doing the calculation)

 Procedure of Registration for VAT in UAE

Once you cross the threshold limit, VAT registration will be compulsory, there is a procedure to get registered under VAT as The FTA, well known as the UAE government's entity which is responsible for implementing, administering and collecting federal taxes in the Emirates made it clear that businesses can register for VAT in UAE by using online services provided by the authority, Ministry of Finance of UAE made an online portal to provide such services well known as eservices.mof.gov.ae. The procedure is same for all different entities (an individual, a company any other commercial entity).

For all those who must be stressing out over how to register under VAT, they should not worry at all as they have to perform certain simple tasks to do the registration, first just go through the online portal of the FTA as they have provided details about the registration and also published some guidelines regarding the same. The registration portal is all easy to access from anywhere anytime as it is available 24*7 to provide better services, which has been specially designed to meet international standards and to provide guidance to registrars as well on the completion of their applications so that they can perform their task effectively and efficiently.

While registering for VAT there are some official documents that are needed for the same as before submission of the application some important documents must be completed.

Important Documents required for VAT registration

Businesses are under obligation to complete the basic required documents for the registration of VAT in UAE, all these documents must be submitted online. List of documents are:

• Trade license copy is must
• Copy of passport of the owner
• Emirates ID proof’s copy of the owner
• Concerned person details such as contact number, name, e-mail id etc.
• Memorandum of Association (MOA) of the company
• Correct and complete contact Details of company such as address, phone number etc.
• Complete and correct Bank Details including IBAN
• All other entities details if owned by the owner
• Last 12 months Income statement should be Signed & Stamped by the owner or the manager or the authorized person
• Expected revenue and expense for the next 30 days after VAT implementation
• Details regarding exporting and importing if done
• If dealing with any custom department, custom code with the Copy of Dubai Custom Code Certificate
• Details regarding the businesses with other GCC countries
• If they are representing more than one entity, whether they want one tax group number for all the entities or separate tax numbers for each
• Experience of businesses done by the owners or directors involved in any previous businesses in past 5 years

After the submission of all the required documents and VAT registration, TRN (Tax Registration Number) will be generated and provided by FTA (Federal Tax Authority) within 2-3 weeks, FTA upload a soft copy of the Tax certificates by the end of January 2018 but to get the hard copy you need to pay AED 500 and also have to send an e-mail on certificates@tax.gov.ae , after that FTA will courier the certificates on the given address