Everything You Need To Know About VAT Registration and Its Procedures in UAE

Ø About VAT preparation in UAE

A VAT (Value Added Tax) is a consumption tax placed on a product when a value is added at each step of the supply chain, from production to the point of sale. The VAT within the UAE was introduced on 1st January 2018. The present VAT rate is at 5%. One of the main reasons why VAT is introduced within the nation is to provide a new source of income, which can be continued to be utilized to supply high-quality public service. It also helps the government to move towards its vision of decreasing dependence on oil and other hydrocarbons as a source of income.
To become registered under the VAT law means a business is approved by the government, as a supplier of goods and services and, is permitted to gather VAT from clients and remit an equivalent to the government. Only VAT registered businesses are allowed to do the following:
  • Charge VAT on the taxable supply of products & services.
  • Claim Input Tax Credit on VAT paid on their purchases, which can be deducted from VAT liability on sales
  • Payment of VAT to the govt.
  • Periodic filing of the VAT return.
In addition to these, all registered companies need to align their business reporting structure in line with the compliance requirements like accurate and updated books of accounts, tax paid documents like credit notes, debit notes, records to all or any inward supplies and outward supplies, tax invoice, etc. are essential to be maintained. Hence, knowing the basics of VAT is one of the vital steps for your VAT preparation and obtaining VAT registration in countries like the UAE, which are going to be the primary step towards transiting your businesses to the VAT era.

Ø What are the Criteria for registering VAT in UAE?

There are certain conditions to meet for registering VAT in the UAE. They are as follows:

  • Business who deal with taxable supplies and imports must register with VAT if the mandatory VAT registration the threshold of 375,000 AED exceeds.
  • When the value of taxable turnover is less than AED 375,000 but more than AED 187,500 per annum then you can voluntarily register for VAT.
  • When you expect your taxable turnover to exceed AED 375,000 per annum in the next 30 days, you are obligated to register for VAT.

Ø Documents required for UAE VAT Registration process:

  • Trade license copy. 
  • The business owners’ or partners’ passport copies.
  • The business owners’ or partners’ Emirates ID copies.
  • The company’s address (including P.O box) & contact details.
  • Memorandum of Association (MOA) of the company.
  • The business owner’s contact details.
  • Company’s Bank Account Details.
  • Business activities description.
  • The company’s income statement for the past year.
  • Power of attorney, articles of association, certificate of incorporation, etc.
  • The business’ experiences.
  • The estimated value of imports for 1 year from each GCC countries.
  • The estimated value of exports for 1 year to each GCC countries.
  • Names of GCC nations if doing business in them.

Ø The Procedure for VAT Registration in UAE

The Ministry of Finance, UAE has proposed companies, to begin with, the VAT registration process. The official website of the Ministry of Finance, UAE could be granting e-services for the organizations to be enrolled. The VAT registration certificate will be posted to the businesses after the issue.

  • Go to https://eservices.tax.gov.ae/en-us/ - the official site of the Ministry of Finance.
  • Click the choice for VAT certificates to get a new page.
  • Click the ‘Start Service option.
  • Complete the registration process and create your unique login id & password.
  • Once you are done with user id and password creation, you can now log in and reach the landing page of the customer.
  • Click ‘Create a new tax request option.
  • On the next step, fill up all the required details.
  • After submitting the required documents and details, you may be directed to the payment gateway.
  • Pay the online fee for the VAT registration procedure.
As the VAT registration procedure is online, it is mandatory to pay the fees online before completing the procedure. Once it is paid, you will get a confirmation receipt or acknowledgment. The VAT will be charged at the 5% rate on all the goods and services except, health, medical services, and food items. When the first phase of the implementation is rolled out, very small businesses will be exempted from the VAT.

Need Any Help For Registering Your VAT In UAE?

Looking for any professionals to come up with a perfect VAT implementation plan for your business? Get in touch with experts like ARC Associates, the top VAT consultants in Dubai. With a set of expert and well-experienced accountants who work towards customer’s goals and wants, you can be reliable over ARC Associates services, with the highest proficiency.

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