Overview of VAT in the UAE 

The VAT, a consumption tax, was implemented in the United Arab Emirates (UAE) on January 1, 2018, with a standard rate of 5%. The FTA implements Value Added Tax (VAT), with the functions to enforce and achieve robust rates for both infrastructure and service-related revenue. It would also advise companies on VAT registration, return filing, and record-keeping. 

If you operate a business in the UAE, understanding how to register for VAT is important for compliance and credibility. In this blog, we’ll guide you on the VAT registration process, look at VAT registration threshold UAE and all that you want to know about FTA VAT registration whether you are in Dubai or somewhere else in the UAE. 

What is VAT Registration? 

VAT registration is the act of registering your business with the state as being involved in supply and selling. When a business gets registered with the FTA to charge, it can collect and remit VAT for the supply of taxable goods and services. A VAT registration certificate will be issued to the business upon registration and this certificate indicates the VAT tax registration number (perhaps also referred to as a VAT TRN registration number) allocated to the business and which should be quoted on all tax invoices. 

VAT Registration Criteria: 

Mandatory VAT Registration Threshold UAE: 

• Businesses with taxable supplies and imports exceeding AED 375,000 annually must register for VAT. 

Voluntary VAT Registration: 

• Businesses with taxable supplies  exceeding AED 187,500 may choose to register voluntarily. 

VAT Registration Requirements: 

Before you can begin registering for VAT voluntarily, you need to assemble a number of documents that contain the information you’ll be asked to share about your business. Below you will find a list of the documents the FTA needs to see to confirm your information and meet the regulations. 

• Trade License Copy, confirming your legal existence in the UAE. 

• The owner’s or the partners’ passports, required for identity purposes.  

• Owner and partners Emirates ID, used for further identification and residence confirmation. 

• Memorandum of Association, which will lay out how your business is organized and what it is set up to do. 

• Bank details of your company, these are required for VAT refund, other tax data and/or information of your company. 

• Description of business activities, which lets the FTA determine what you are doing and how does it impact VAT obligations. 

VAT Registration Process: 

Below are the necessary procedures you need to go through for voluntary VAT registration in UAE: a) Prepare and Organize Before you apply, make sure that you have all the documents and information required so that you can get 

• Pre-Registration Analysis: Conduct a detailed pre-registration analysis to determine when voluntary registration applies. Consider current turnover, growth expectations, and benefits of VAT registration. 

• Create a tax group: If your business is part of a corporate group of companies consider setting up a tax group for the purposes of VAT. This should simplify VAT registration and ease compliance of the VAT group.  

• Online registration: You will need to have an account on the FTA website to initiate the VAT registration. This is an easy process where you will have to enter some fundamental information about your business, including your business name, where you are located, how someone can get in contact with you, as well as your bank details.  

• Prepare supporting documents: All documents must be ready including business license, financial reports, passport copies, Emirates ID, MOA, bank account details, and business activity overview. 

• Apply and wait for the application: Fill in the VAT registration in the FTA e-Services portal. The FTA will assess the application and relevant criteria, which can take up to 20 working days. Upon approval, the FTA will issue a VAT registration certificate and VAT registration number (TRN). 

Let CBM Consultants be your Trusted Guide: 

CBM Consultants streamline the VAT registration process in the UAE for your business. Our experts handle everything from eligibility assessment to documentation submission, ensuring your compliance with local VAT regulations. With CBM Consultants, you receive thorough support and guidance, making VAT registration services straightforward and stress-free, so you can concentrate on running your business efficiently.   

Common Mistakes to Avoid: 

• Misunderstanding the Registration Thresholds 

Businesses often miscalculate turnover compared to VAT registration limits. Track turnover closely, considering all taxable supplies. Verify if you reach mandatory or voluntary registration thresholds. 

• Incomplete or Incorrect Documentation 

To prevent delays or rejections in the application process, ensure all necessary documents are completed and double-checked for errors and omissions. 

• Late Registration 

Lately registering VAT can lead to fines and backdating, so it’s crucial to avoid unnecessary scrambling at the last minute. 

• Failing to Update Registration Details 

Traders often neglect updating VAT registration details due to changes in business structure or activities. Regular updates are crucial to avoid discrepancies with taxable activities. 

Conclusion: 

VAT in the UAE does not have to be daunting. Having knowledge of how to register for VAT and meeting the VAT registration rules can help you stay compliant and prevent penalties. Whether you are a startup or a networking company in Dubai, and you’re looking into the VAT registration UAE process and the VAT registration certificate online process, if you’re prepared, this is going to be a walk in the park for you! 

If you have not registered yet, you should now check if you crossed the VAT registration threshold in UAE and begin your FTA VAT registration process today.