VAT Registration in the UAE: As of 1st of January,2018, all companies that all under the threshold of the Value Added Tax (VAT) law are supposed to undergo a VAT registration to be recognized as a goods and service provider by the government. A VAT registered business is allowed to charge the VAT from its customers and further make payment to the government.

Being VAT registered includes several perks:

• Businesses are allowed to charge VAT from their customers on the goods and services purchased.
• The claim from the VAT paid on customers’ purchases will be deducted from the VAT on sales.
• VAT needs to be paid to the government, but business owners can periodically file for VAT returns.

Who should register for VAT?

VAT registration can be tricky. Not all business need to register for VAT. There is a threshold that needs to be met and based on that there is mandatory registration, voluntary registration and exemption.

Mandatory Registration

VAT registration for a resident business is mandatory when taxable expenses and value of supplies exceed AED 375,000 in Previous 12 months or are anticipated to exceed in the next 30 days of the current fiscal year. When the business is a non resident, VAT registration is compulsory regardless of the threshold.

Voluntary Registration

All the businesses that do not fall under the threshold of the mandatory registration, can seek voluntary registration. But there lies a threshold for the Voluntary VAT registration as well. When taxable expenses and value of supplies exceed AED 187,500 in Previous 12 months or are anticipated to exceed in the next 30 days of the current fiscal year, businesses can apply for this. This amount is 50% of that of mandatory registration.

VAT Registration Exemption

VAT registration is exempted for businesses for those that fall below the threshold required for voluntary registration, when taxable expenses and value of supplies are even below AED 187,500.

VAT Registration Process

Before beginning the actual process it is best to acquire all the documents and keep them close: Copy of Trade License, Passport copy (Owner/partners), Emirates ID (Owner/Partners), Memorandum of Association (MOA), Company’s bank account details and IBAN, details of business turnover for the last 12 months (Balance Sheet, Audited Reports or Bank Statements), Customs Authority Registration Code.

• To begin the process, one would have to visit the Federal Tax Authority website, where they provide a portal for VAT registration.
• Business owners are required to sign up and create an account and follow all the self-explanatory instructions.
• Upload all the necessary documents and submit.
• Upon submission, a Tax Registration Number (TRN) will be generated.

A person conducting business cannot have more than one TRNs. For branches functioning from separate emirates, the same TRN can be used. Although, a business partner in the business can apply for a separate TRN.

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