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Ever since January 2018, UAE got introduced to VAT. Referred to as the value-added tax, its standard rate is 5%. VAT offers revenue for improving public services as well as infrastructure. If you are unsure whether your business needs VAT registration in Dubai, this post comes in handy. Let’s understand what you need to know about VAT registration in UAE.
When to Register for VAT in UAE?
The UAE or the United Arab Emirates implemented VAT on January 1, 2018, at 5%. While not all companies need VAT registration, businesses above the mandatory registration threshold must consider the VAT registration procedure.
Learning the right time to register for VAT might be complex. And if enterprises exceeding the mandatory registration threshold don’t register at the right time, they get subjected to fines and penalties.
Correspondingly, voluntary registration might sound like a positive approach. After all, it opens new doors of opportunities for tax refunds & offset expenses. However, it might engage businesses in unnecessary costs and hassle. That’s the reason proficient VAT consultants Dubai can guide you through.
When the business gets registered under VAT law, the government acknowledges it as the supplier of services and goods. And they also get authorised for collecting VAT from the customers & remit same to the UAE government. VAT-registered enterprises must follow these pointers:
- Charge VAT on the taxable supply of services and goods
- Claim the Input Tax Credit on the VAT on purchases, deducted from the VAT liability, particularly on sales
- VAT payment to the UAE government
- VAT return’s periodic filing
The registered businesses must align reporting structure with compliance requirements like:
- Updated and accurate books of accounts
- Tax paid documents like credit notes, tax invoices, records to inward supplies & outward supplies, and debit notes
Thus, understanding the rudiments is one of the significant steps for VAT preparation. So, obtaining the registration is your starting point. But before that, you have to schedule an appointment with Accountant Dubai to learn the VAT details.
Types of Business That Must Register for VAT
Businesses crossing defined annual aggregate turnover threshold will require undergoing VAT registration. Depending on their registration threshold, it’s either mandatory or optional. They can apply for registration or seek exemption from the VAT registration. Given below are how VAT registration gets classified:
- Voluntary Registration
- Exemption from the Registration
- Mandatory Registration
Last Date of VAT Registration in UAE
Regarding the deadline for the VAT registration in UAE, the FTA or Federal Tax Authority has already started inviting the applications for the registration. In addition, the FTA has also opened the portal to give businesses an opportunity for online registration.
The VAT registration in UAE in the FTA portal gets carried out in a phased way, based on the business turnover.
Calculating the VAT Turnover for VAT Registration
Any Dubai enterprise with an annual turnover exceeding a mandatory registration threshold & voluntary registration threshold needs to apply for the registration. Thus, it becomes crucial for businesses to understand the type of supplies considered for the annual turnover.
Applying for the VAT Registration in UAE: Steps to Follow
In Dubai, businesses exceeding the mandatory threshold must apply for registration. And to facilitate the registration procedure, the FTA or Federal Tax Authority has opened the portal for online registration. The deadlines have already got announced & registration will get carried out accordingly.
It may be critical for enterprises to determine the obligation towards the VAT registration. However, understanding how to apply for the VAT registration & knowing the details needed for completing the procedure are somewhat compulsory.
Before starting or applying for the VAT registration, it is important to have an understanding of the type of details needed. You’d also need to understand the steps for completing the online registration procedure so that you are knowledgeable about the steps in advance. As soon as you know the basics, the registration process will get completed quite seamlessly.
Plus, you will also be able to avoid pesky delays because of incorrect details, leading to application denial. On this note, you can take assistance from competent and knowledgeable VAT consultants Dubai who will guide you with the steps easily. Now, let’s learn the steps with an in-depth approach from the mentioned pointers:
- You will need to create the e-Service account
- After which, log into the e-service account
- Get the VAT Registration Form and check the eight sections, under which you need to put in the details and complete the procedure; follow these eight sections
- About the candidate
- Candidate’s details
- Banking details of the applicant
- Contact details of the candidate
- About VAT registration
- Business relationships
- Declaration
- Review & submit
What Should You Learn About VAT Group Registration?
In UAE, an individual initiating an enterprise cannot have two or more TRN or tax registration numbers (provided the individual is not prescribed in UAE Executive Regulation). So, even when you operate through branches in two or more Emirates, you can have only one VAT registration. With the same approach, when more than one individual is associated with the business, they can apply for the VAT group registration.
How Can VAT Registration in Dubai Benefit Small Businesses?
When it comes to running a small-scale enterprise in the UAE, entrepreneurs might not have registered for VAT. But it goes without saying that if you are confident that your enterprise will hit the threshold of AED 375,000 each year, you can opt for mandatory registration. And here are the benefits you get in turn.
- It will get the VAT refunds
- It gets to compete against the significant names in this industry
- VAT registration opens newer business scopes
- As soon as you reach the mandatory threshold, FTA will find it out: so VAT registration will eliminate your worries
- VAT-registered businesses get a TRN, giving a successful brand image
As long as you are a beginner, VAT registration will seem challenging. Thus, a professional team like Accountant Dubai can guide you through the basics accordingly.
