UAE VAT Registration: A Comprehensive Guide

VAT registration in UAE is mandatory for businesses meeting or exceeding the threshold. Once registered, companies are required to charge VAT on taxable goods and services they provide, and they can also reclaim VAT paid on their business purchases and expenses. Failure to register for VAT or comply with VAT regulations can result in penalties imposed by the FTA. In this comprehensive guide, you’ll learn about the process of UAE VAT registration and all its requirements. 

Requirements For VAT Registration In UAE

For VAT Registration in UAE, businesses must adhere to specific requirements set by the FTA. Here is a summary of the key points regarding VAT registration in the UAE based on the provided search results: 

Mandatory Registration Threshold: To register for VAT in UAE, businesses must meet specific criteria. UAE-resident businesses making taxable supplies exceeding AED 375,000 in the last 12 months or expected to exceed this threshold in the next 30 days must mandatorily register

Voluntary Registration: Businesses can opt for voluntary registration if their taxable supplies and imports surpass a certain threshold.

Online Registration: VAT registration in UAE is an online process through the FTA portal, where businesses create an account and submit the necessary documentation. 

Tax Group Registration: According to FTA two or more legal entities can form a tax group. Details of the criteria for each member are provided below.

• Business criteria: Each member must conduct a business, defined broadly as any regular, independent activity carried out in any location, whether in the UAE or elsewhere. Individuals not engaged in business cannot form or join a tax group.

• Legal person criteria: Each member of a tax group must be a legal entity, such as a company or government entity. A legal entity possesses legal personality under relevant laws, enabling it to enter contracts in its own name. Typically, companies are legal entities formed under company laws, but other similar entities, such as those established by decree under local laws in the Emirates, can also qualify. Natural persons (individuals) cannot create or join a tax group.

• Establishment criteria: A natural person having multiple establishments in his own name will include all those licenses in his individual VAT registration and file a unified VAT return.

• Related parties (and control) criteria: Each member must have sufficient economic, financial, and organizational ties with the others to be considered “related,” which may include legal, shareholding, or voting rights connections. One person must have the ability to control the members.

Documents Required: The following documents are generally required for UAE VAT registration:

• Copy of Trade License
• Passport copy of owners/shareholders/managers
• Emirates ID copy of owners/shareholders/managers
• Contact details of the company
• Memorandum of Association (MOA)
• Bank details of the company
• Turnover declaration for the last 12 months
• Sample of sales or purchase invoices
• Customs letter if dealing with the customs department
• Additional documents may be required depending on the type of organization.

UAE VAT Registration Process

To register for VAT in UAE, businesses must follow a step-by-step process. Here is a summary of the key steps involved in the VAT registration process in UAE:

Create an Account: Businesses or individuals looking to register for VAT must create an account on the FTA web portal. 

Submit Required Documents

Online Application: After gathering the necessary documents, proceed to submit them online through the FTA portal for VAT registration. 

Wait for Approval: Once the application is submitted, it typically takes around 2-3 working weeks (20 working days) for the FTA to review the application and issue the TRN.

Receive VAT Certificate: Upon approval, you will receive a VAT certificate with a unique TRN, allowing your business to issue taxable invoices and claim input VAT. 

By following these steps and ensuring all required documents are submitted accurately, businesses can successfully register for VAT in the UAE and comply with tax regulations. If you encounter any difficulties and don’t have time for registration, ADEPTS provides VAT Registration Services, VAT Documentation Assistance, VAT Filing & Compliance Services, and many other VAT-related services such as VAT Deregistration Services, and Tax Consultation Services.

Why Does VAT Registration in UAE Matter?

VAT registration is significant for several reasons such as:

Enhanced Business Credibility: VAT registration enhances the credibility of a business, instilling trust among investors and customers. It signifies financial orderliness and compliance with regulations, which can attract potential clients. 

Avoidance of Penalties: Businesses exceeding the VAT registration threshold must register to avoid legal issues and potential penalties. Non-compliance with VAT regulations can lead to fines, making registration significant for legal adherence. 

• The penalty for late registration will be AED10,000.
• The penalty for failing to submit a deregistration application on time will be AED 1,000 in the case of delay, and on the same date monthly thereafter, up to a maximum of AED 10,000.
• The penalty for failing to display prices inclusive of VAT will be AED 5,000
• The penalty for failure of the taxable person to issue a tax invoice or the alternative document when making any supply will be AED 2,500 for each detected case.
• The penalty for failing to issue a tax invoice or tax credit note will be AED 2,500 for each detected case.

Reach out to us for effective compliance with VAT registration services in UAE.