Introduction to VAT Registration in UAE
A business has to be registered under the VAT law to be acknowledged by the government as a supplier of Goods and Services. Being registered under the VAT law gives them the authority to collect VAT from customers and to revoke the same to the Government. Businesses that are registered under the VAT law will be allowed to:-
- Charge VAT on the taxable supply of goods and services.
- Claim Input Tax credit on VAT that is paid on their purchases. which will be deducted from VAT liability on sales.
- Pay VAT to the Government.
- File the VAT return periodically.
It is necessary to understand the fundamentals of VAT because it acts as a stepping stone for your VAT preparation. VAT registration in UAE can be classified into:-
- Mandatory VAT Registration
- Voluntary VAT Registration
- Exemption from VAT Registration.
Hidden Benefits of VAT Registration in UAE
VAT registration is not necessary for many small businesses. But, you should consider it if you are confident that the taxable supplies turnover of your business will hit the current level of AED 375,000 per year for mandatory registration. Some benefits that small business owners enjoy from being VAT registered are as follows:-
- The business will be able to get VAT refunds:- A business will be allowed to obtain refunds on VAT from the previous six months when it undergoes voluntary VAT registration. This implies that if you are unable to match the criteria while doing business for the past six months, being registered under the VAT law will help you in reclaiming VAT if you have kept invoices and records.
- The business can tackle with major players in the industry:- Your startup would make wonders through voluntary registration under the VAT law. Registering under the VAT law in UAE is possible if your annual earnings are within the range of AED 187,500 to AED 375,000 per year.
- VAT registration eliminates the worry about reaching the VAT threshold:- Many small businesses unknowingly exceed the current mandatory VAT registration threshold. If the Federal Tax Authority(FTA) gets to know about this, the business will have to pay the price of not being registered. Registering for VAT will eliminate you from ending up with a fine or penalty from the Federal Tax Authority(FTA).
- VAT registration can bring in new business opportunities:- Many established businesses do not trust in working with a startup unless it is registered for VAT in UAE. A business will lose potential clients if it is not able to issue a proper invoice. Therefore, it is essential to register for VAT, so that the clients are confident that they are working with a reputable business.
Guide to UAE VAT Registration Process
Businesses require a Copy of the Trade license, the owner’s/partners’ passport copy, Emirates ID, Memorandum of Association (MOA), the Company’s Bank Account Details and IBAN, and the details of the Business turnover for the last 12 months along with the Customs Authority Registration Code for UAE VAT registration process.
Other Required Documents for UAE VAT Registration Process
The Company’s registered address and P.O. Box, Projected revenues and expenses for the next 30 days, details of business activities, names of GCC Countries (if their business is even set up there), and the name of the Tax Group are the additional documents required for UAE VAT Registration process.
UAE VAT Registration Process
It is important to keep the above-mentioned documents and details ready before you start the registration process on the VAT registration portal. The steps for the UAE VAT registration process are:-
- Enter the FTA Online Portal.
- Sign up for a new account.
- Follow the instructions that are provided on the FTA website for starting your registration process.
- Submit the application after entering relevant details.
- A Tax Registration Number (TRN) will be provided to the user after submitting the documents successfully.
The details used for signing up will be used as your login and password. Businesses will get the notification by email and SMS when the TRN is generated.
For carrying out these services, it is essential to establish a good relationship with outsourced accountants in Dubai. This increases the shareholder value and reduces the expenses of those functions that are not directly related to your business. For reducing the amount of time that is being spent on bookkeeping and accounting, you can outsource these services to professional chartered accountants in Dubai.
How ZBS can help
Being a professional accounting & auditing firm in Dubai, ZBS can get your VAT registration in UAE. We are a team of professional accountants in Dubai, who can help you in accounting and administration, auditing, and tax services for your business. ZBS provides VAT registration and VAT consultancy services in Dubai and UAE. ZBS also provides major tax consultancy services in Dubai and UAE.
ZBS is one of the best outsourced accountants that provides accounting services in Dubai. Feel free to contact us for getting your VAT registration done in UAE and for getting your accounting and audit services done.