VAT Registration in UAE

VAT or Value Added Tax is an indirect tax, which is transaction-based and levied at every phase of the supply chain. It is charged whenever value gets added to the product across the entire supply chain, ranging from production to the point of sale.

TAX Registration Deadline,

Monthly VAT returns are due by the 28th day of the month following the end of the VAT return period or the next business day if the 28th day is a holiday. For example, the VAT return for May 2024 is due by June 28th, 2024.

Importance of VAT Registration

As a business owner in the UAE, you should register for VAT. This verifies compliance with legal regulations and lets businesses fix the right VAT amount. It also lets businesses reclaim VAT on purchases. VAT reclaim is a significant saving for businesses that make a huge turnover. Voluntary registration provides a competitive edge to businesses and shows that you are a professional business that follows strict compliance with the tax laws in the UAE. Voluntary registration in the UAE also makes it easy to do business with other VAT-registered businesses.

Companies that fail in VAT registration or in filing VAT returns in the UAE are subject to fines. Any business that operates without getting VAT registration will be imposed a fine of AED 10,000 and an additional AED 1000 for every tax period for which no VAT return was filed. Additionally, the non-registered companies can’t earn input tax credits.

Therefore, VAT registration in the UAE is important to stay away from unwanted penalties. If you are running your business in the UAE, top VAT consultants or VAT registration services providers can help you be clear about all the tax obligations

To get a Tax Registration Number or TRN, you should submit all documents necessary for VAT registration. The following are the documents required for online VAT registration:

Copy of trade license (shouldn’t be expired);
The copies of passports that belong to owners/shareholders/managers who own the non-expired license.
Copies of Emirates ID of the owners/shareholders/managers who own the non-expired license.
Contact details of the company including the P.O. box and the detailed address with building, area, etc.
Memorandum of Association (MOA) – not necessary for sole establishments;
Contact details of the concerned person, including the mobile number, email ID, and designation;
Company’s bank details which include Account Name, Account Number, IBAN, Branch Name, and Bank Name;
Turnover declaration of the past 12 months, which should be signed and stamped by the company’s owner and should be printed on the letterhead;
Sample of signed and stamped sales/purchase invoices;
Attached customs letter in case the business deals with the customs department.

The documents essential for VAT registration will be submitted to the Federal Tax Authority (FTA) online. After applying for online VAT registration, FTA would take about 2-3 working weeks to review the application and finally issue a TRN (Tax Registration Number). Copied

Documents required for VAT Registration

Copy of trade license
Passport copy of business owner and partners
Copy of Emirates ID held by owner and partners
Memorandum of Association (MOA) of the company
Company contact details
Bank account details
The income statement for the last 12 months
Nature of business and activities performed