VAT Registration Service in the UAE
Value Added Tax (VAT) is the tax imposed on consumption at each stage of the supply chain; ultimately the end consumer will bear. In other words, the value added tax (VAT) levied on the purchase and sale of taxable goods and services. The current VAT rate in the UAE region is five per cent. Anyone who engages in any Business activity in the UAE is a taxpayer and must register with the Federal Tax Authority for VAT (VAT) within a specified time frame and obtain a VAT TRN (Tax Registration Number) if the business comes under specified threshold of registration.
There are certain things a business or a person who wish to apply for VAT registration should know – Whether he should apply for Voluntary registration, or mandatory registration or as a tax group. Appointing an expert professional like us will help you to analyze these things.
Who Should Register For VAT in UAE?
Mainly there are 2 options for VAT registration in the UAE,
- Mandatory VAT Registration in the UAE
Mandatory VAT registration in the UAE is for businesses incorporated within the UAE region and the value of supplies within the state exceeds AE Dirham 375,000 in the last 12 months, then he or the business must be registered under UAE VAT.In case the business generates the total value of supplies exceeds AE Dirham 375,000 the mandatory threshold within the next 30 days , they too should register for VAT in the UAE .
- Voluntary VAT Registration in the UAE
Voluntary VAT Registration in the UAE applies for the companies or businesses incorporated within the UAE and not meeting the mandatory VAT registration threshold are given an option for optional or voluntary VAT registration in the UAE. But the thing is to apply for Voluntary VAT registration in the UAE you must generate the total value of supplies more than 187,500 in the last 12 months.
VAT Registration in the UAE for New Company
A newly incorporated company in the UAE does not require VAT Registration in the UAE. VAT Registration for a new company in the UAE is valid only when the company expects or generates an annual turnover of AED 187,500 at least. Once you are in this position you can apply for TRN through FTA online portal, the Federal Tax Authority will review and either approv and issue Tax certificate nor reject the application.
VAT Group Registration in the UAE
VAT Registration as a tax group is depending on the number of companies running the business under a main head of business with multiple business licenses (Branches of main company with separate license). In this case they should apply for Tax group registration. For Tax group registration all business should be incorporated in the UAE, the FTA will issue a TRN for the group.
But there is a demand, only the representative member of a group or upcoming tax group can apply to issue TRN for the tax group. To do so the representing member should already hold Tax Registration Certificate (TRN) or VAT registration application while applying for tax group .
What is after submitting the Application?
Once a business submitted the application through FTA online portal , the application status will be ‘Pending’ and Federal Tax Authority takes minimum of 20 business days to complete the review procedure . After this process FTA will approve the application and will issue a TRN certificate if all the required documents are proof enough. In other case FTA will change the status of the application to ‘Resubmit’, and will request some more documents to ensure the authenticity. Once you submitted the additional requested documents by FTA , the application will go again to the pending status and then FTA will start reviewing your application and will issue a TRN certificate . The business registered for VAT can take VAT from their customers.
VAT Registration Penalties
A business having more than or equal to AE Dirham 375,000 for the last 12 months , the business comes under Mandatory registration category . A business should apply for VAT registration within 30 days of reaching the mandatory threshold.If the business fails to do so a Penalty of AED 10,000 will be imposed as late registration penalty.
VAT Deregistration
How VAT Registration is important similarly Deregistration of VAT in UAE is also important. Once you fall down from the specified threshold or you closed your business legally you should close your VAT liabilities if applicable and should apply for Deregistration within 20 business days. In case of failure to do so you may get a penalty of AE Dirham 10,000. When you applying for VAT cancelation you should be very clear and accurate with your submitting documents requested by FTA.
Why You Should Choose FANAVI for VAT Registration?
Fanavi Accounting & Tax Consultants is providing the best services for VAT registration in UAE. We will help you analyze your turnover whether you should register for VAT or still have to wait to meet the threshold. Our VAT experts will apply for VAT registration in the UAE online and obtain your company’s Tax Registration Number (TRN) along with your company’s VAT certificate issued by the FTA. For VAT registration services in the UAE – Contact us