vat registration -

VAT REGISTRATION

VAT (Value Added Tax) is an indirect tax imposed on the consumption of goods and services at each stage of the supply chain. It is ultimately borne by the end consumer, while businesses act as tax collectors by charging VAT on their sales and remitting it to the government.

What is VAT

VAT was introduced in the UAE on January 1, 2018, as part of the Gulf Cooperation Council (GCC) VAT framework. It is levied at a standard rate of 5% on most goods and services, although certain items are either zero-rated or exempt from VAT. VAT’s purpose is to generate revenue for the government while encouraging transparency in business transactions. VAT is applied at every step of production and distribution, but businesses can recover the VAT they have paid on inputs, making it a tax on the added value at each stage of the supply chain.

Types of VAT Registration

Mandatory VAT Registration: Businesses are required to register for VAT if their taxable supplies and imports exceed the mandatory threshold of AED 375,000. This is calculated based on the previous 12 months or if the business expects to exceed this amount in the next 30 days.
Voluntary VAT Registration: Businesses that have taxable supplies and imports exceeding AED 187,500 can register voluntarily. This is particularly useful for startups or businesses anticipating growth, as they can claim back VAT on purchases.
VAT Exemption: Certain supplies, such as residential properties (under specific conditions), financial services, and local passenger transport, are exempt from VAT. Exempt businesses are not required to register for VAT unless they provide both exempt and taxable supplies.
VAT Group Registration : Companies with a group of related entities can opt for VAT group registration. This allows the group to be treated as a single taxable entity, simplifying transactions within the group and reducing the overall administrative burden.

0 ⁺

Years Of Experience

0 ⁺

Years Of Experience

VAT-REGISTRATION

Step-by-Step Guide to VAT Registration on the FTA Portal

Registering for VAT with the UAE Federal Tax Authority (FTA) is a straightforward process that requires attention to detail and proper documentation. Follow these steps to register for VAT:

Documents Required for VAT Registration

To successfully register for VAT, businesses are required to submit several documents. Ensure you have the following on hand before starting the registration process

Certificate of incorporation (if applicable).

Passport copy of the owner or partners.

Emirates ID copy of the owner or partners

Proof of business activities, such as contracts or business agreements.

Details of the business' turnover, including audited financial statements or bank statements.

Customs registration number, if the business is involved in imports or exports.

Bank account details for the business.

Proof of physical presence, such as a lease agreement or utility bill, for the business location.