What Is UAE VAT? Why do you want to Register VAT in UAE?
All the businesses who holds out a taxable supply of goods & services or whose turnover exceeds the threshold limit i.e.; annual revenue of more than 375,000Dh will need to register under Value Added Tax. Businesses who have an annual revenue below 375,000Dh but over 187,500Dh will have the option to register as well, this process of registration is called VAT registration. For some businesses GCC VAT registration is mandatory. Any companies who run their business without registering under GCC VAT then it’s an offense and heavy penalties may be imposed.
In this article, we cover the following topics:
1. What are the Documents Required for UAE VAT Registration?
2. UAE VAT Registration Requirements?
3. Who should get registered for UAE VAT?
4. UAE VAT Registration Process
5. Fees Applicable to Register UAE VAT?
6. What is the Penalty for not Registering Under VAT?
7. When will be a Business Need to Apply for Multiple UAE VAT Registrations?
8. Advantages for Businesses in Registering for UAE VAT?
9. Benefits of Registering Under UAE VAT
10. How Can a Taxpayer Select Composition Scheme?
11. How Can We Change VAT Registration of a Business?
12. What Are Details That Can Be Changed or Updated?
What are the documents required for UAE VAT Registration?
The documents required to register for UAE VAT are:
A valid permit of residence
A letter of request signed by the applicant
A passport copy of the applicant
A photocopy of decree
A photocopy of the act of incorporation
A request letter signed by the company
A copy of trading license.
UAE VAT Registration requirements
Businesses which require registering under UAE VAT regardless of their turnover:
Agents of a supplier
Casual taxable person
When a business which is registered has been transferred to someone, the transferee shall take registration with effect from the date of transfer.
Anyone who drives inter-state supply of goods
Non-resident Taxable person
Those paying tax under the reverse charge mechanism
Person who supplies via e-commerce aggregator
Aggregator or E-commerce operator
Input service distributor
Who should get registered for UAE VAT!
Any businesses whose turnover exceeds the threshold limit i.e.; annual revenue of more than 375,000Dh will need to register under Value Added Tax. Businesses who are having an annual revenue below 375,000Dh but over 187,500Dh will have the option to register for GCC Value Added Tax.
UAE VAT registration process!
Value Added Tax registration in UAE is now made available in the FTA (Federal Tax Authority) online portal, you are to put up an account on the FTA website and fill the VAT registration form. Recently the FTA has announced that a systematic approach will be followed in the VAT registration process. The businesses who are in this benchmark must abide by the relevant application.
Businesses with an annual turnover which exceed AED 150 million should apply for registration by 31 October 2017
Businesses with an annual turnover more than AED 10 million should apply for registration by 30 November 2017
Remaining businesses with an annual turnover exceed the mandatory registration threshold (expected to be AED 375,000) should apply for registration by 4 December 2017
This document captures the calculation of turnover for VAT purposes, a walk-through of VAT registration through the FTA registration portal, registration of a VAT group and types of books and records required to be held by a taxpayer to ensure accurate tax compliance.
when extended, the details explaining the VAT registration processes are found in the VAT registration guide. The FTA also provides a guide which clarifies all the information businesses should be aware of while entering the VAT registration process.
Fees applicable to register UAE VAT?
It will be mandatory to pay the registration fees onlinebefore completing the procedure. Once the fees are paid you will get a acknowledgement receipt.
What is the penalty for not registering under VAT?
Whoever not paying tax or making short payments (genuine errors) has to pay a penalty no less than Dh500 and no more than triple the value of the tax on the transaction in question. In the case of a business failing to keep the required records and other information specified in the tax laws, the business will be fined Dh10,000 the first time and Dh50,000 for a repeated offense.
When will a business need to apply for multiple UAE VAT registrations?
Any organizations that run numerous businesses or has numerous trade registrations under one name should apply for multiple VAT registrations. These might include organizations with more than one branches, different parts of the same business owned by different people, partnership businesses with multiple trades, family businesses divided among family members & businesses with one or more investors.
Advantages for Businesses in registering for UAE VAT?
Business owners will never wish to receive a letter from the Tax-man. Anyone would go wild after hearing this. Especially when you never wish to work on the taxes. Many Organizations in UAE are worrying about how is their businesses is going to get affect and how they can stay unaffected. The only solution I figure out is to get a reliable ERP VAT software for your company. It does all your accounting with added benefits and will be an asset for your business transforming it into greater levels. Maintaining a vigilant out-look on your business turnover will enable you in getting noticed for the VAT registration deadline.
For businesses that voluntarily opt in for VAT registration
Take input tax credit
Make sales without restrictions
Register on e-commerce websites
Have a competitive advantage compared to other businesses
How can a taxpayer select composition scheme?
To select a composition, scheme a taxpayer should file a request for a composition scheme change with the government (FTA). This can be done online after logging into the FTA portal. This hint should be given at the beginning of every Financial Year by a dealer wanting to select a Composition Scheme.
Unique Identification Number!
Unique Identification Number (UIN) is a special type of VAT registration for foreign diplomatic missions and embassies that are not liable to pay taxes.
How can we change VAT registration of a business?
A business can update or correct its VAT registration details when:
The application is being processed and
The business is already registered under VAT (application is already processed)
What are details that can be changed or updated?
A business owner can apply for changes of the following items:
Name of business
Address of the principal place of business
An additional place of business
Addition, deletion or retirement of partners or directors, Managing Committee, CEO i.e., people who are responsible for day to day affairs of the business
Mobile number or e-mail address of the authorized signatory
VAT registration is simple process which will earn fame for your business. So, don’t lose time, grab it quickly and be in the list that will be talked by the people.