VAT Registration

VAT Registration in UAE

VAT Registration UAE refers to the set of procedures by which a person can register with the Federal Tax Authority (FTA).

Any person, natural or otherwise, can apply for VAT Registration or Excise Tax Registration in the UAE if they satisfy certain conditions. Only such persons who hold a valid TRN or Tax Registration Number as issued by FTA have the right to collect and remit tax in the UAE.

How to Register for VAT in UAE?

The Federal Tax Authority (FTA) through its continuous planning and commitment has ensured that the process of VAT registration is quite minimal. The entire process of VAT registration is done online.

A person who wishes to avail of VAT registration shall create an e-services account in the FTA portal using their e-mail address.

During the course of registration various document shall be submitted for verification of FTA  some of which are given below for your reference:

• Documents Identifying Authorised Signatory: Passport, Emirates ID, Etc
• Trade License of the Company
• Certificate of Incorporation, Articles of Association, Power of Attorney, Etc
• Description of Business Activities
• Turnover for the last 12 Months in AED
• Supporting Document for 12-Month Sales
• Expected Turnover in the next 30 days
• The estimated value of imports for one year from each GCC countries
• The estimated value of exports for one year to each GCC countries
• Whether you expect to deal with GCC suppliers or customers
• Supporting documents for customs registration in each emirate (if applicable)
• Details of Bank Account

Who should get Excise/VAT Registration in the UAE?

As per UAE VAT Law, there are two types of VAT registrations in the UAE. One is Mandatory VAT Registration & the other is Voluntary VAT Registration.

A. Mandatory VAT Registration:

• A person, natural or otherwise, who has made supplies/sales of more than AED 375,000 over the previous 12-months period shall mandatorily do his VAT registration in UAE.
• Any person, who does not have a place of residence in the UAE (Non-resident) shall mandatorily do VAT register in UAE if he makes any supply in the UAE irrespective of his turnover. This mandatory VAT registration is applicable to such nonresidents only if no one else is responsible to pay VAT on his behalf against such supplies.
  Eg: Mr. Andrew, a UK Citizen, does not have a place of residence in the UAE. He performed services worth AED 100,000/ to the residents in the UAE who do not have a VAT registration in UAE. In this case, even though the supply value is less than the mandatory VAT registration threshold, Mr. Andrew shall apply for VAT registration in UAE. He will be responsible to collect and liable to pay VAT to the authority. This rule applies to both natural and judicial persons.
• Further, if any person who estimates, on reasonable grounds that his supplies/sales will exceed AED 375,000 in the next 30-days shall also mandatorily apply for VAT registration in UAE.

B. Voluntary VAT Registration:

• A person can opt for VAT registration in UAE under the voluntary option if his supplies/sales for a previous 12 months period exceed AED 187,500/ (but less than AED 375,000/).
• In cases, a person who estimates, on reasonable grounds, that his supplies/sales will exceed AED 187,500 (but less than AED 375,000/) in the next 30-days may opt for VAT registration voluntarily.
• A person can opt for VAT registration in UAE under voluntary option if his expenses which are subject to tax for a previous 12 months period exceeds AED 187,500/.
• In cases, a person who estimates, on reasonable grounds, that his expenses which are subject to tax will exceed AED 187,500/ in the next 30 days also can opt of VAT registration under the Voluntary VAT registration method.

Exceptions for VAT registrations in UAE

Federal Tax Authority has clarified that a person can apply for an exception from VAT registration in UAE if 100% of his supplies/sales are Zero-rated as per the provisions of the Law. Such persons who want to opt for the exception from VAT registration shall notify the authority about their decision through the VAT registration form. Authority, if they feel such an exception is reasonable, will accept the application of the exception.

Concept of Tax Group

As per UAE VAT laws, any person conducting business in UAE is not allowed to have more than one VAT Registration number. Any person who has economic, financial or regulatory interests in multiple organizations may group their entities under one tax group.

Such grouping of businesses under one tax group eases the compliance requirements of the UAE VAT Laws. The tax group shall be considered as one single entity for the purposes of UAE VAT. Any transactions between the entities inside the tax group shall be out of the scope of UAE VAT.

Why Emirates Chartered Accountants Group?

Though it is perceived that the process of tax registration in the UAE is simpler when compared to many other tax regimes across the globe; it comes with its own set of hassles.

During the process of VAT registration, which is a seven-step procedure, various documents and details need to be filled in. Arranging the information accurately requires great knowledge and persistence. That is where our tax registration service comes in handy.

We are at the forefront of UAE VAT since its inception and have handled tens of thousands of clients successfully.

Our experts can guide you through the procedures and help you compile the necessary documents as sought by FTA.

Further, we have noted that FTA seeks explanations or clarifications on the details submitted which can be overwhelming for inexperienced minds. We will ensure that all the queries from FTA are answered within the stipulated time.