Documents Required for VAT Registration in UAE
Value Added Tax (VAT) is levied on all the stages of the supply chain to boost the economy of countries. Developing countries in the Gulf Cooperation Council have recently registered themselves under VAT laws and implemented them on January 1, 2018, with a VAT rate of 5%. All taxable businesses operating in UAE must register themselves under the VAT legislations stated by Federal Tax Authorities (FTA). There are certain types of information and documents required for VAT registration in UAE and to get the Tax Registration Number (TRN) for the business. In this article, we will discuss some essential conditions that should be fulfilled for VAT compliance in Dubai.
Obligations for VAT Registration in UAE
According to UAE authorities, VAT registration applies to ALL business activities conducted by the registered individual. A person operating a business in UAE can register for VAT, not the business itself. Although the person can be an individual such as a sole trader, a legal person, or another form of entity such as a charity, club, partnership, and trust. You must provide information regarding the person that is going to be registered, and their intended business activities, when applying for VAT registration.
VAT compliance helps businesses operating in the UAE to improve their stability and goodwill. With a valid VAT invoice, you are eligible to claim VAT refunds on all goods and services.
Mandatory vs Voluntary VAT Registration
The basic difference between voluntary and mandatory VAT registration in UAE is depending upon the revenue generated from the business taxable supplies and imports.
Voluntary Registration: Businesses and individuals who have crossed or expect to cross the voluntary threshold of AED187,500 in the past 12 months are eligible for voluntary VAT registration.
Mandatory Registration: Any entity exceeding the mandatory threshold limit of AED 375,000 must register for VAT within 20 working days of doing so, anyway a late VAT registration penalty of AED 10,000 will be imposed.
List of Documents Required for VAT Registration in UAE
In order to register for VAT by the Federal Tax Authority, an applicant must submit various documents and information (in English and Arabic). Incomplete or incorrect registration can lead to a significant delay in the registration process. Here we will mention the documents required for VAT Registration in UAE such as:
- A copy of the trade license
- Passport copy of business partners and owner who owns the trade license.
- Copy of Emirates ID of the business owner and partners.
- Memorandum of Association (MOA) of the company
- Company valid contact details (P.O box, Physical & mailing address)
- Complete details of the company’s bank account.
- Income statement or turnover declaration for the last 12 months
- The nature of business and activities performed.
- Contact details of the concerned person. (Phone number, Email address)
- The expected revenue and expenses for the next 30-days after completing the VAT implementation.
- Does the business deal with the customs department? In that case, attach the customs letter.
- Are they dealing business in exporting or importing?
- The company is in any GCC country, then mention the country name.
- Details about expected exempt supplies.
- Provide a complete list of all business owners or partners in UAE by attaching the trade license within the last 5 years.
VAT Registration of a Tax Group
A tax group is made up of two or more legal entities, each of which must be resident in the UAE and meet certain control criteria. Tax groups can also be formed by multiple businesses of different natures. The Federal Tax Authority (FTA) dictates that if a person holds more than 50% shareholdings in more than one company, he may form a tax group for all companies, and the FTA will give the individual a single tax identification number for all the companies in the tax group.
It will also be necessary to complete a separate Tax Group registration application. After your group application is approved and accepted, you will be given a TRN.
What Happens after your Business is VAT Registered?
After submission of the VAT registration application in accordance with the FTA standards, you will be allocated a Tax Registration Number (TRN). It takes almost 2-3 weeks and helps businesses to secure their transactions.
How do Startups Take VAT Registration Services?
If you planning a business in Dubai or anywhere in the United Arab Emirates at a small, medium, or large level, it’s essential to get your taxable business registered under VAT laws. Being a startup, you must appear to your potential customers that the business is complying with all tax policies and legislations. This may also ensure other traders that you are trusty and profitable business partners. Each startup business must assure the following guidelines for VAT compliance in UAE.
- VAT eligibility assessment for individuals and businesses.
- Get ready for the online process of application on the official portal of FTA.
- Prepare a list of information and documents required for VAT registration.
- Answering the follow-up questions until the TRN is issued.
Get Expert VAT Consultancy Services in Dubai
Many individuals or businesses are stuck in various VAT services in Dubai due to the extensive list of VAT services. If you are in the same situation, then Bestax Chartered Accountants provides exclusive VAT consultancy services in Dubai by understanding your business model for VAT compliance. We have a team of expert VAT consultants that assist you in preparing and executing all VAT-related concerns.
It includes preparation and submission of VAT invoicing, VAT registration, VAT return filing, VAT refund submission, voluntary disclosure, VAT de-registration, and VAT audit services. For more information, get in touch with us.
Phone Number +971 56 7981808
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