The process of applying for VAT registration in the UAE can be a bit daunting, especially if you're not familiar with the VAT system. Here's a quick guide on how to apply for VAT registration in the UAE, so you can get started on your business journey as soon as possible.
What is VAT?
Value-Added Tax (VAT) is a consumption tax levied on most goods and services sold in the United Arab Emirates (UAE). The standard VAT rate is 5% but some items are exempt or incur a reduced rate of 0%. VAT is charged at each stage of the production and distribution process, from the purchase of raw materials to the eventual sale to the consumer. Businesses registered for VAT must charge VAT on their supplies and account for the tax to the Federal Tax Authority (FTA).
VAT was introduced in the UAE on 1 January 2018 as part of the GCC-wide VAT agreement. The UAE is one of five countries in the GCC that has implemented VAT.
Who should register for VAT?
If you are a business owner or self-employed person in the United Arab Emirates (UAE), you should register for VAT if your taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.
You must register for VAT even if your turnover is below the mandatory registration limit if you:
- are already registered for another tax in the UAE
- expect your turnover to go above the voluntary registration threshold of AED 187,500 over the next 30 days
- are based outside the UAE but supply goods or services within the UAE
If any of the above apply to you, you can register for VAT by completing an Application for VAT Registration form and submitting it to the Federal Tax Authority (FTA).
How to register for VAT in UAE?
If you are running a business in the UAE, you will need to register for VAT. The process is relatively simple and can be done online.
- Go to the website of the Federal Tax Authority (FTA).
- Create an account by providing your personal details and setting up a username and password.
- Once you have logged in, click on “VAT Registration” under the “Services” section.
- Fill out the online form with your company’s details, such as name, trade license number, Emirates ID number, etc.
- You will also need to provide your bank account details so that the FTA can set up direct debit for your VAT payments.
- Once you have submitted the form, you will receive a confirmation email from the FTA within 3 working days.
- Once your registration is confirmed, you will be issued a vat registration UAE certificate which you must display at your place of business.
What are the benefits of registering for VAT?
If you are doing business in the UAE, you should register for VAT. The main benefits of registering for VAT are:
1) You can recover the VAT that you have paid on your business expenses.
2) You can avoid penalties and interest charges if you file your VAT returns on time.
3) You will be able to issue VAT invoices to your customers, which will help you to improve your cash flow.
4) You will be able to claim back any input tax credit that you are owed.
5) You will be able to register for e-services, which will make it easier for you to comply with your VAT obligations.
How to file a VAT return in UAE?
If you are registered for fta vat registration in the UAE, you must file a VAT return periodically. This is typically done on a quarterly basis, but may be more or less frequent depending on your particular circumstances. The deadline for filing VAT returns is the 28th of the month following the end of the reporting period.
To file your VAT return, you will need to log in to the Federal Tax Authority's e-services portal. Once you are logged in, you will be able to access the VAT return form. This form must be completed in full and submitted electronically.
Once you have submitted your VAT return, you will need to make a payment if you owe any tax. Payments can be made online through the e-services portal, or by bank transfer or cheque. If you are paying by bank transfer, you will need to include your VAT registration Dubai as the reference.
Conclusion
VAT registration in UAE is a simple and straightforward process, as long as you have all the required documents. By following the steps outlined in this article, you can ensure that your application is complete and correct and that you will be registered for VAT in no time.
