VAT Registration in UAE

Tally Solutions | Updated on: April 25, 2023

Introduction to VAT Registration in UAE

Being registered under the VAT law means that a business is acknowledged by the government, as a supplier of Goods and Services and is authorized to collect VAT from customers and remit the same to the government. Only VAT registered businesses will be allowed to do the following:

  • Charge VAT on the taxable supply of goods and services
  • Claim Input Tax Credit on VAT paid on their purchases, which will be deducted from VAT liability on sales
  • Payment of VAT to the government
  • Periodic filing of VAT return

Apart from the above, all registered businesses have to align their business reporting structure in line with the compliance requirements such as accurate and updated books of accounts, tax paid documents such as Tax invoice, credit notes, debit notes, records to all inward supplies and outward supplies etc. are required to be maintained.

Therefore, understanding the fundamentals of VAT will be one of the important steps for your VAT preparation and obtaining VAT registration will be the first step towards transiting your businesses to the VAT era.

Who should register under VAT?

Are all businesses liable to register under VAT? No, only those businesses crossing the defined annual aggregate turnover threshold are liable to register under VAT. Based on the registration threshold, a business will either be mandated to register or as an option, a business can apply for registration or can seek exemption from VAT registration

On this basis, VAT registration in UAE can be classified into the following:

  • Mandatory VAT Registration
  • Voluntary VAT Registration
  • Exemption from VAT Registration

To know more Who should register under VAT.

VAT registration Deadlines in UAE

As a move towards implementation of VAT in UAE on 1st January, 2018, the Federal Tax Authority (FTA) is inviting applications for VAT registration. The FTA has opened its portal to allow the businesses to register online. The early call for online registration allows the businesses to be prepared well in advance and be ready to charge VAT from 1st January, 2018. The UAE VAT registration in the FTA portal is carried out in a phased manner depending on the turnover of the business.

To know more VAT registration Deadlines in UAE.

VAT Turnover Calculation for Registration in UAE

In UAE VAT, businesses whose annual turnover exceeds the mandatory registration threshold of AED 375,000 and the voluntary registration threshold of AED 187,500 are allowed to apply for VAT registration. Therefore, it is crucial for businesses to understand what type of supplies are considered in deriving the annual supplies turnover and how to calculate the VAT turnover for registration in UAE.

To know more VAT Registration Threshold Calculation in UAE.

How to Apply for VAT Registration in UAE

In UAE, the businesses whose turnover exceeds AED 375,000 have to mandatorily apply for VAT registration. To facilitate the businesses to register, the Federal Tax Authority (FTA) has opened its portal for online VAT registration. The deadlines based on the turnover of businesses are already announced by FTA and the registration will be carried out in a phased manner. While it is crucial for businesses to determine their obligation towards VAT registration, it is also important for businesses to know how to apply for VAT Registration and understand the level of details required to complete the online registration process.

This is because, before applying or starting the online VAT registration process, having a good understanding about the type of details required and steps to complete the online VAT registration will help you to prepare well in advance. As a result, the registration process can be completed easily and can avoid unnecessary delays due to furnishing of incorrect details which could even lead to rejection of registration application.

  • Creation of e-Service Account
  • Login to your e-Service Account
  • VAT Registration Form: The online VAT registration form contains 8 sections as shown below, in under which the details need to be furnished for completing VAT registration
    • About the applicant
    • Details of the applicant
    • Contact details
    • Banking details
    • Business relationships
    • About the VAT registration
    • Declaration
    • Review & submit

To know more Apply for VAT registration in UAE.

VAT Group Registration

In UAE VAT, any person conducting business is not allowed to have more than one Tax Registration Number (TRN), unless otherwise prescribed in the UAE Executive Regulation. Thus, even if you are operating via branches in more than one Emirate, only one VAT registration is required. With a similar objective, if two or more persons are related or associated parties in the businesses, they are allowed to apply for VAT group registration.

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