UAE has implemented Value Added Tax (VAT) since January 01, 2018. VAT is a type of indirect tax that is applied on consumption of goods or services at the point of sale.
VAT registration in UAE
VAT is charged at each stage of the supply chain. The tax percentage is 5 per cent and like every indirect taxation burden of cost is borne by the end user, but the responsibility of collection and submission of VAT from customers is on the businesses. Businesses collect and account fall the VAT on behalf of government and can subsequently claim the VAT refunds from the government.
Mandatory VAT registration for all Business in UAE
All the businesses in UAE whose annual turnover exceeds minimum threshold of AED 375,000/- must register themselves for VAT under the Federal Tax Authority (FTA). So, it is crucial for businesses to determine their obligation towards VAT registration, it is also important for businesses to understand the level of details required for the registration process.
Voluntary VAT registration
All the businesses in UAE whose turnover exceeds the voluntary registration threshold of AED 187,500 can apply for VAT registration. So, it is important for businesses to develop proper understanding about the type of supplies and services that need to be considered in deriving the annual turnover.
VAT Group Registration
It is permitted for group of persons to apply for VAT group registration. These persons should be related or associated parties in the businesses.
Required documentation for VAT registration
In UAE there is an online process for VAT registration and fee submission. It takes about 2-3 weeks to get the Tax Registration Number (TRN) from Federal Tax Authority (FTA) after online registration. Following documents are mandatory for VAT registration in UAE.
• Copy of valid Trade License.
• Copy of License owner’s / owners’ passport.
• Copy of License owner’s / owners’ Emirates ID.
• Memorandum of Association (MOA) (not required for sole proprietorships).
• Complete address of business.
• Concerned person’s contact information (mobile number, e-mail).
• Bank account details.
• Information about any other entities owned by the owner.
• Signed and stamped Income statement for the preceding twelve months.
• Expected revenue and expense for the next 30 days after VAT implementation.
• Other general information about business operations.
Where we come in
We at “Virtual Accountants (VA)” are providing services of VAT registration and VAT Accounting to keep your business running and to avoid any VAT penalties and fines.
Virtual Accountants is equipped with a team of enthusiastic VAT experts who will ensure that your lack of familiarity with VAT rules and regulations, structure and compliance issues and lack of an efficient accounting system does not affect your business. Our exclusive VAT consultancy services involves in providing VAT registration, VAT return filing, understanding your business model and evaluation of VAT’s impact on your business and providing assistance in all VAT related concerns.