A Comprehensive Guide on VAT Registration Process in UAE

VAT stands for Value Added Tax and is an obligatory tax for all the business entities in UAE. Because of this common enforcement, VAT registration is done free of cost. The governing body of VAT in UAE is the Federal Tax Authority (FTA). The VAT registration procedure can be completed online on the official FTA website. While the tax has been enforced for quite some time now, many business people are still not well-versed with the entire application and registration process. Further, some people know the partial process.

Hence, in this post, we are going to discuss the registration of VAT in UAE in detail. We will discuss every single step at length and once our readers are done reading this, they will be equipped with the most inclusive and comprehensive understanding of the registration.

Now, let us begin

VAT Registration – Basics

  • The registration can be done online on the official portal of FTA. The registration process is also called opening an e-Services account.
  • During the registration, you will be asked certain questions regarding the nature of the products or services you offer, nature and location of your business and location of selling your products and services etc.
  • We recommend taking some expert help for this step as your tax values will be based on the answers you provide. There are many reputed tax consultants in UAE offering VAT services. These experts understand the latest tax regulations and governmental norms perfectly and will help you complete the registration without much ado.
  • Though the setting-up of an e-Services account is as simple as creating any other online account, the tax consultants can help you do the job with finesse. Also, they will help you set the account and fill business details such that you pay only what you need to as the tax.

Now, let us move on

Identifying the Right Threshold is Crucial

As a taxpayer, you have to identify the right threshold or tax slab for your business. The threshold details (as per the current tax regulations) are as follows:

  • The businesses with an annual income more than AED 375,000 have to mandatorily do the VAT registration.
  • The businesses that have an annual income between AED 187,500 & AED 375,000 have to register voluntarily.
  • The start-up ventures with VAT-related expenses that are more than AED 187,500 are required to do VAT registration.
  • Even if your business is under the specified threshold values, you must do the VAT registration as it will prove handy in future.

As you are doing the registration online, you have to keep the business documents with you while filling the form. If you are taking help from some tax consultant, this step will be handled by him.

This brings us to the next section

Documents Required for VAT Registration

Take a look at the various documents that are required for online VAT registration in UAE:

  • Copies of the Passports of the business owner/partners
  • Copy of Trade License
  • Emirates ID of the business owner and partners
  • IBAN and bank account details of the business or company
  • Tax group and tax number details
  • The address or PO Box number of the business/company
  • Memorandum of Association (MOA)
  • Next month’s statement of revenue projection
  • Customs Authority Registration code
  • Import and export business activities details
  • A complete record of the previous year business revenue inclusive of financial sheets, bank statements and audit reports

The documents required might vary from person to person or business to business. You must know that these documents are a vital part of VAT registration. Your registration will not be complete even if a single of them is missing. So, make sure you submit the required and accurate documents. Altering the documents, submitting fake documents and modifying their contents is a legal offence and will land you in trouble. So, avoid indulging in such activities.

Online VAT Registration – Steps and Details

  • Log on to the official FTA portal and click the ‘Sign-up’ button
  • You will find “Getting Started Guide”. Read it carefully to understand the rules and dos and don’ts of VAT registration
  • Once you are done with the reading, tick the confirmation box to proceed.
  • You will reach a web page asking for your personal details such as:
  • Contact details
  • Bank details
  • Business details
  • Submit the details accurately
  • Now, sign the declaration and press the ‘SUBMIT’ button after reviewing the submitted information
  • Next, you will reach the VAT form that will have 8 sections that will ask the information of your business
  • Once you submit all this information, your registration will be done partially. At this time, you will receive an SMS and email on the mobile number and email ID submitted by you in the first step
  • Now that your business is VAT compliant, submit the taxes and file the VAT returns to the FTA, as applicable. We strongly advise taking help from some reputed tax consultant for these procedures. This will help you avoid mistakes and it will also keep you away from monetary losses

This is how you complete VAT registration

VAT Registration and Compliance – Things to Consider

  • As the VAT is still a newly introduced tax in UAE, it is still a new clause to be tackled by the business setups of all types and all scales. Hence, to avoid any mistakes you must take expert help.
  • There is no healthy way to bypass the VAT or other taxes. Though the loopholes are known to exist since decades, and are being used globally, it is important to make sure you take expert counsel for that. You must always remember that these loopholes also have a limit and are not applicable to every business in the same way.
  • Further, being a new business or start-up doesn’t rule you out from VAT. You must complete the registration and complete the filing as applicable to your business.

This brings us to the completion of our discussion. We hope that all our readers find the information shared here helpful. For more suggestions and expert guidance, you can reach out to us in the comment section.