Do you want to know the necessary steps for VAT registration in UAE in 2023? To register for VAT with the Federal Tax Authority, there are certain steps that you’ll need to follow. We’ll provide an overview of what information you need and how to complete your registration.
Here we will discuss all the aspects of VAT registration in the UAE in 2023.
- Introduction to VAT Registration in UAE
- Registration Eligibility of VAT in UAE
- Step-wise procedure for VAT Registration
- Documents to Support
- Who is eligible to form a VAT group?
- VAT Fine in UAE for Non-Registration
- Frequently Asked Question
Introduction to VAT Registration in UAE
Being registered under the VAT laws and policies implies that a company is recognized by the government as a distributor of goods and services and is allowed to collect and repay VAT from consumers. Only VAT-registered companies will be permitted to undertake the following:
- Impose VAT on taxable supplies of goods and services.
- Get Input Tax Subsidy for VAT paid on purchases, which will be subtracted from output VAT liability.
- VAT payment to the Government
- VAT returns must be filed regularly.
Aside from the foregoing, all enterprises must conform their business reporting system with regulatory requirements, such as keeping appropriate and up-to-date books of accounts, tax-paid documents such as tax invoices, credit notes, debit notes, records of all inward and outward supplies, and so on.
Understanding the principles of VAT will thus be one of the most crucial elements in your VAT preparation, and acquiring VAT registration will be the first step in transitioning your firm to the VAT era.
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Registration Eligibility of VAT in UAE
The VAT registration requirements for enterprises are dependent on the value of their taxable supply, which comprises standard-rated supplies, zero-rated supplies, reverse charges received, and foreign items.
Mandatory Registration
If the total value of a company’s taxable supply and imports inside the UAE reaches the necessary registration level of AED 375,000 either in the past 12 months or within the next 30 days, it must register for VAT.
Voluntary Registration
A company can voluntarily register for VAT if the total amount of its taxable supply and imports inside the UAE reach AED 187,500 either in the preceding 12 months or in the next 30 days.
If a company’s taxable expenses reach the voluntary registration level, it can register voluntarily as well.
Step-wise procedure for VAT Registration
- Log on to the FTA website and access the VAT registration portal.
2. After you establish your account, you will get an email with instructions on how to verify your information and activate your account. Now you are ready to access the portal using your username and password.
3. After logging in, go to the VAT registration form and fill out the essential data required to finish the registration.
Documents to Support
To apply for VAT registration in the UAE, you will need to provide some supporting documents. These should include
- Copy of your passport,
- Emirates ID,
- Trade license
- Any other official documents that show you are allowed to do business in the UAE.
Additionally, if requested by tax authorities, provide the company description, turnover figures from the past 12 months, and estimated future turnover levels as well as expected import and export values.
When you’ve finished the application, click Submit. The FTA will examine your submission and issue your Tax Registration Number (TRN).
Who is eligible to form a VAT group?
It is feasible to register as a VAT group if a firm has many companies that deal with one another.
For VAT reasons, all of the firms in a VAT group are considered as one entity in a group registration. Supplies made among members of a VAT group are VAT Exempt (no VAT is due on them).
The VAT group’s deliveries to entities outside the VAT group are subject to conventional VAT restrictions. When a business registers as a VAT group, it is assigned a single TRN and must file a single VAT return.
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VAT Penalty in UAE for Non-Registration:
According to UAE VAT law, every firm qualified for required VAT registration in UAE in 2023 must apply within the time range established by the FTA. In case of negligence will lead to a monetary penalty for procedural non-compliance.
A firm has 30 days after meeting or exceeding the necessary VAT registration threshold to register for VAT and get a Tax registration number.
If a company fails to register before the deadline, it will be obligated to pay a late registration penalty of AED 20,000.
Frequently Asked Questions
Here we answer some frequently asked questions about VAT registration Services in UAE. If your question is not listed here you can ask in the Comments section.
Which businesses are not eligible to apply for VAT registration in UAE in 2023?
Before applying, make sure your business meets the eligibility criteria for VAT registration. For this, you visit the FTA website, and also take the services of experts like Reflechir Consultancy.
A condition such as:
- The taxable supplies are no longer made by the registered person.
- Over 12 months, the value of their taxable supply is less than the voluntary registration level of 187,500 AED.
- Their taxable supply has a value below the mandatory level of 375,000 AED during 12 months.
The FTA will inform a taxable person of their deregistration status and the date when it will take effect once they submit a deregistration application.
Registration of VAT in UAE for Non-Residents
Regardless of the above-mentioned thresholds, a non-resident doing taxable business in the UAE must register for VAT.
Which businesses are exempt from UAE VAT 2023?
The categories of supplies mentioned below are exempt from VAT:
- The supply of some financial services
- Residential properties
- Bare land
- Local passenger transport
