Value Added Tax (VAT) is an essential source of Government revenue in many countries around the world. The United Arab Emirates (UAE) implemented a 5% standard VAT rate on January 1, 2018. To ensure compliance with the law, it is vital for UAE-based businesses to grasp the VAT registration procedure. In this step-by-step guide, we will explain how to register for VAT in the United Arab Emirates.
Step 1: Determine Your Eligibility
In the UAE, not all enterprises are required to register for VAT. As of the September 2021, enterprises that satisfy the following criteria must register for VAT
- Your taxable supplies and imports exceed the twelve month threshold for mandatory registration, which was AED 375,000. Please note, however, that the UAE Government may periodically revise this threshold; therefore, it is essential to verify the most recent information.
- If your taxable supplies and imports fall between the mandatory threshold and the voluntary registration threshold i.e AED 187500, you may voluntarily register.
Step 2: Gather Required Documents and Information
Before beginning the registration procedure, collect the following documents and information:
- A copy of your professional license.
- A copy of your passport and Emirates identification card (for individuals).
- Contact information, including an email address and phone number that are active.
- Financial information pertaining to your business, such as the anticipated annual revenue.
- The products and services you provide.
Step 3: Register on the Federal Tax Authority (FTA) Portal
To register for VAT in the UAE, you must register on the Federal Tax Authority (FTA) website. Follow the instructions below:
- Visit the official website of the FTA at https://tax.gov.ae/ar/default.aspx
- Navigate to “E-Services” and select “Register for VAT.”
- Follow the on-screen instructions to create a new account with the required information.
Step 4: Complete the VAT Registration Application
Log in to your FTA portal account and complete the VAT registration application once you have obtained an FTA portal account. This form requires you to provide extensive information about your business, including financial data, information about your business licence, and your contact information. Be sure to verify the veracity of all entries.
Step 5: Application Submission
After completing the application, it should be extensively reviewed to ensure accuracy. Once satisfied, submit the application via the FTA’s application portal. You will receive an email confirming receipt of your application.
Step 6: Wait for Approval
The FTA will evaluate your application and, if necessary, may request additional documentation or information. The processing time is 20 working days after successful submission of the application. The FTA provides you with a response confirming your VAT registration status. This includes a certificate of VAT registration if your application is accepted.
Step 7: Compliance and Continuous Reporting
Once you are enrolled for VAT, you must comply with UAE VAT laws and regulations. This includes charging VAT on taxable supplies, keeping accurate records, and filing regular VAT returns in accordance with FTA requirements. Non compliance with VAT regulations may result in fines.
Conclusion
Registration for VAT in the United Arab Emirates is an essential step for enterprises operating in the country. Following this step-by-step guide and keeping aligned of any updates or modifications to VAT regulations will assist your business in remaining compliant with UAE tax regulations. If you have specific concerns or require individualised guidance, it is advisable to consult with a qualified tax expert or legal professional like Reflechir Consultancy, who are familiar with UAE VAT regulations.
