If you are a business owner in UAE, you need to get your business Dubai vat registration law that has come into effect from 1st January 2018. Once a company is registered for VAT in Dubai, it must file VAT returns regularly or set by the authority.
VAT Registration is mandatory for companies and individuals doing business in the UAE if the annual turnover is more than AED 375,000/-.
The VAT registration processes in Dubai involve:
- Register for VAT
- Charge VAT on the invoices issued to the clienteles
- Announce the VAT to the Federal tax authorities through a VAT filing
- Documents Required for VAT Registration in Dubai
- Passport copy or Emirates ID to prove the identity of the authorized party
- Trade license copy of the company
- Certificate of Incorporation of the company
- Certificate of Articles of Association of the company
- Certificate of Power of Attorney of the company
- Description of business activities
- Turnover for the last 12 months in AED
- Supporting document for 12-month sales
- Expected turnover in the next 30 days
- The estimated value of imports for one year from all GCC countries
- The estimated value of exports for one year to all GCC countries
- Your consent, whether you deal with GCC suppliers or customers
Supporting documents for customs registration in the Emirates if applicable.
- Details of Bank Account
- VAT Registration Processes
Basically, a business can opt for any of the two types of VAT registration in UAE:
Mandatory Registration
It is mandatory that a business must register for VAT:
If the total value of its taxable supplies and imports exceeds the required registration threshold over the previous 12 months
If the company expects that the full value of its taxable supplies and imports will exceed the obligatory registration threshold in the next 30 days.
The threshold for mandatory registration of a business is AED 375,000. But this threshold does not apply to foreign organizations.
Voluntary Registration
A company may opt for Voluntary Registration:
If it does not meet the mandatory registration criteria,
If the total value of its taxable supplies and imports or taxable expenses in the preceding 12 months surpasses the voluntary registration threshold,
If the business foresees that the full value of its taxable supplies and imports or taxable payments will exceed the voluntary registration threshold in the next 30 days.
The threshold for voluntary registration of a company is AED 187,500.
Calculating the Tax Registration Threshold
As per the Federal Decree-Law No. (8) of 2017 on Value Added Tax, to determine whether a person has exceeded the Mandatory Registration Threshold and the Voluntary Registration
Threshold, the following details will be considered:
The value of Taxable Goods and Services
The value of Concerned Goods and Concerned Services received by the Person
The value of the whole or relevant part of Taxable Supplies belongs to said Person if he has, wholly or partly, acquired a business from another person who made the supplies.
The value of Taxable Supplies made by related parties following the cases stated in the Executive Regulation of this Decree-Law.
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