DOES VAT APPLY TO MY BUSINESS?
Before a business can apply for UAE VAT registration, it must meet these requirements:
- VAT is obligatory in the UAE on businesses whose taxable supplies and imports over the past year exceed the mandatory threshold of AED 375k.
- It also applies to businesses that foresee the total value of its taxable supplies and imports exceeding AED 375k in the next 30 days. This threshold does not apply to foreign companies.
- Businesses with taxable supplies and imports or taxable expenses of AED 187.5k (or above) in the next 30 days may apply for voluntary VAT. This also holds true for a company expected to make a turnover of the threshold amount in the same time frame.
WHAT IS INCLUDED IN TURNOVER FOR VAT TAX IN THE UAE?
- Turnover for VAT in the UAE includes taxable supplies (all goods and services supplies made in the UAE).
- The value of taxable goods and services imported and a whole or part of the other business.
- It also includes the value of taxable supplies made by the acquired whole or part of the business.
- On the other hand, taxable supplies include all goods and services made in the UAE. Only a limited number of supplies are exempt from the taxable supply for VAT.
You can read our blog on the UAE tax system for further guidance.
HOW CAN BUSINESSES REGISTER FOR UAE VAT TAX?
Unregistered businesses in the United Arab Emirates may register for Value Added Tax via the Federal Tax Authority online portal.
The VAT registration process in the UAE is a simple two-step process. First, set up an e-service account and second, access the new account and complete the VAT registration.
CREATE AN E-SERVICES ACCOUNT
An FTA-approved e-Services account is mandatory for businesses to register for VAT in the UAE successfully. To start the process, visit the Federal Tax Authority website and follow these steps to open an e-Service account:
- Select the Sign-up button on the home page and fill in details like a password, email ID and security code.
- After filling and submitting the form, an automatic email will be generated and sent to your registered email ID for verification.
- Log into your new e-Services account with your username and password.
REGISTER FOR VAT
Your e-Services account will be created after you verify your email address. After logging in successfully, you will be asked to ‘Register for VAT’ and taken to the “Get Started Guide.”
The guide details specific requirements related to VAT registration in the UAE. Divided into short sections, it discusses the process and the data required to complete it.
It is strongly recommended that you read the guide carefully to avoid errors. After you have read it, click “Proceed” and a VAT registration form will appear.
The form includes eight sections, with each requiring specific details.
- About the Applicant
- Details of the Applicant
- Banking Details
- Contact Details
- About VAT Registration
- Business Relationships
- Declaration
- Review and Submit
Applicants must complete all mandatory fields of a current section before moving on to the next. Remember:
- You should also save your progress as you fill out the form.
- After completing the sections with the necessary details, click Save and Review. At this point, you can check your answers before submitting them.
- Click on Submit for Approval after you have reviewed the details. The application’s status on the Dashboard will change to Pending.
- You will also receive an email confirming that your application has been received.
WHAT ARE THE DOCUMENTS NEEDED FOR UAE VAT TAX REGISTRATION?
Documents to be submitted while registering your business on the FTA e-services portal include:
- A copy of the business trade license.
- Passport copies of the partners or company owners as declared on the license.
- Copy of the company’s Memorandum of Association (MOA).
- Bank account details.
- Contact details of the company.
- Emirates ID copy held by the business partners or owners.
- Nature of performed businesses and activities.
- An income statement from the last 12 months.
- Anticipated income & expenditure for the upcoming 30-days after receiving the Tax Registration Number
HOW TO CHECK VAT REGISTRATION?
You can always review the progress of your application after completing the requirements on the UAE VAT registration portal. Being aware of the following terms can help you keep track of the application.
- Drafted: The registration form hasn’t been completed or submitted.
- Pending: The form has been received by the FTA and is either under review or withheld until additional information is received from the applicant.
- Suspended: Your registration form has been suspended, a Tax Registration Number (TRN) has been received, and your tax group registration has been approved.
- Rejected: The FTA has rejected the registration form.
- Approved: Registration has been approved, and your business is registered for VAT.
LATE REGISTRATION
Those who fail to register for VAT under the deadline set by the Federal Tax Authority are liable to pay a fine of AED 10k. Registered users can access the “late registration penalty” option to pay the late fee on their dashboards.
Once the FTA reviews your application and finds it satisfactory, it will issue a Tax Registration Number (TRN). The official confirmation will be in the form of a VAT Certificate.
FREQUENTLY ASKED QUESTIONS
WHAT IS THE STANDARD VAT RATE FOR COMPANIES IN THE UAE?
The standard rate of VAT in the UAE is 5%.
DO I NEED TO REGISTER FOR VAT IN THE UAE?
Yes, if you have a business in the UAE with imports and supplies that exceed AED 375k annually, you are required to register for VAT.
HOW TO REGISTER TO VAT ONLINE IN THE UAE?
To register for VAT online in the UAE, you’ll need to visit the official Federal Tax Authority website to create a new e-services account. Use the sign-up button on the homepage and provide the required details. After completing the form, click the submit button to receive an automated email on your verified email ID. You can now start your registration for VAT in the UAE.
WHAT SECTORS ARE EXEMPT FROM VAT IN THE UAE?
Rents in Dubai for residential units are real estate transactions exempt from VAT. Other sectors in the UAE that are VAT exempted include:
- Financial services
- Bare land
- Local passenger transport
WHAT IF I NEED TO AMEND MY VAT REGISTRATION IN THE UAE?
All amendments you make after registering must be updated on your records within 20 business days. Some VAT registration updates and modifications, like those under the category of ”Business Relationships,” require approval from the Federal Tax Authority. For a complete list of amendments that require approval from the Federal Tax Authority, visit their official website.
That’s a wrap on our guide to VAT registration in the UAE for businesses. Apart from the eligible companies, businesses from some sectors do not need to register for VAT. Check out this VAT exemption in the UAE guide to learn more.
If you need help navigating the complicated processes of Value Added Tax, some excellent tax and VAT consultants in the UAE can help you.
