What comprehensive steps and guidelines are outlined in the “VAT Registration” section of the UAE Federal Tax Authority’s official website to assist businesses in completing their VAT registration process?
Business owners in the UAE can begin registering for VAT on 1st October, 2017. This guide explains the process involved in registering your business for VAT and covers the following topics:
- Eligibility for registration
- How to register for VAT
- Supporting documents
- VAT timeline
- Who can register as a VAT group
- Deregistration
The thresholds for businesses to register for VAT are based on the value of their taxable supplies, including standard-rated supplies, zero-rated supplies, reverse charges received, and imported goods.
Mandatory Registration
A business must register for VAT if the total value of its taxable supplies and imports within the UAE exceeds the mandatory registration threshold of AED 375,000, either during the previous 12 months or within the upcoming 30 days.
Voluntary Registration
A business can voluntarily register for VAT if the total value of its taxable supplies and imports within the UAE exceeds the voluntary registration threshold of AED 187,500, either during the previous 12 months or within the upcoming 30 days. Additionally, a business can register voluntarily if its expenses exceed the voluntary registration threshold.
Non-resident Registration
A non-resident doing taxable business in the UAE must register for VAT regardless of the above-mentioned thresholds.
VAT will come into effect on 1st January, 2018. The electronic registration portal for VAT will be open during the fourth quarter of 2017 on the Federal Tax Authority (FTA) website.
How to Register for VAT
Businesses can start registering for VAT on 1st October, 2017, by logging into the online VAT registration portal provided by the Federal Tax Authority (FTA). The registration process is straightforward and involves:
- Open the VAT registration portal on FTA website and create a user account.
- After creating your account, you will receive an email to verify your details and activate your account. Once verified, you can log in to the portal using your user credentials.
- After logging in, navigate to the VAT registration form and provide the required details to complete the registration.
- Submit supporting documents to validate your information, including:
- Passport copy
- Emirates ID
- Trade license
- Any other official documents authorizing your business to conduct trade within the UAE
Provide the following details about your business:
- Description of the business
- Turnover figures for the previous 12 months
- Projected turnover figures for the future
- Expected values of imports and exports
- Once you have completed the application, click “Submit.” The FTA will process your application and respond with an email confirming your Tax Registration Number (TRN).
VAT timeline
Businesses registering for VAT will not incur any registration penalties until April 30th, 2018; however, they must settle all taxes due from January 1st, 2018. The original VAT registration deadline of December 4th, 2017, has been extended to April 30th, 2018, by the FTA.
Who Can Register as a VAT Group?
Companies with multiple entities trading with each other can opt to register as a VAT group. In this arrangement, all entities within the VAT group are considered a single entity for VAT purposes. Supplies between group members are disregarded for VAT (no VAT is charged on these transactions), while supplies to entities outside the group follow standard VAT rules. A VAT group is assigned a single Tax Registration Number (TRN) and files a single VAT return.
De registration
A VAT-registered entity in the UAE may apply for deregistration if:
- It no longer makes taxable supplies.
- Its taxable supplies fall below the voluntary registration threshold of AED 187,500 over 12 consecutive months.
- Its taxable supplies fall below the mandatory threshold of AED 375,000 over 12 months.
Voluntarily registered entities must remain registered for at least 12 months before applying for deregistration. Each GCC member state can set its own minimum registration period and additional conditions for deregistration. After applying, the FTA will notify the entity of its deregistration status and specify the effective date of deregistration.
