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A Guide to VAT Registration UAE
United Arab Emirates (UAE) introduced Value Added Tax (VAT) with a taxation rate of 5% on January 1, 2018. VAT is defined as a general consumption tax on goods and services including toys, stationery, electronics equipment, cosmetic surgery, oil and gas products, sale and rent of commercial buildings, hotels, motels, jewelry and more. VAT is levied on registered businesses at each step of the supply chain for goods or services.
A Guide to VAT Registration UAE
A business must register for VAT if the turnover exceeds the threshold value of 375,000 AED in a year. Businesses with taxable expenses less than 375,000 USD but more than 187,500 AED have the option to register for VAT voluntarily.
Eligible businesses must register for VAT with the Federal Tax Authority (FTA), UAE. For a business to register successfully, the paperwork must be precise and accurate. Businesses hire VAT Consultants in Dubai/UAE to manage their taxation needs for VAT registration.
VAT registered businesses must submit their VAT return to the FTA at the end of the allotted taxation period failing which they may attract penalties. The allocated tax period of a business is generally a month or a quarter as per the turnover. VAT returns have to be filed within 28 days of the lapse of the tax period to avoid fines. Businesses hire VAT Filling and Accounting Services in Dubai/UAE who take care of taxes while they can concentrate on their core business.
Benefits of VAT Registration UAE
VAT registration offers the following benefits to a business:
- Ease of doing business in UAE:
A VAT registered business will find it much easier to conduct its operations in UAE. Organizations and SMEs are hesitant to deal with companies that cannot produce a tax invoice. VAT registration garners trust among business partners, clients, lenders, and suppliers.
- Boosts brand image:
Smaller companies must register for VAT to boost their brand image and gain the confidence of prospective clients. A VAT registered business in UAE is considered credible, established and trustworthy.
- Ease of doing business in UAE:
A VAT registered business will find it much easier to conduct its operations in UAE. Organizations and SMEs are hesitant to deal with companies that cannot produce a tax invoice. VAT registration garners trust among business partners, clients, lenders, and suppliers.
Eligible businesses must register for VAT with the Federal Tax Authority (FTA), UAE. For a business to register successfully, the paperwork must be precise and accurate. Businesses hire VAT Consultants in Dubai/UAE to manage their taxation needs for VAT registration.
VAT registered businesses must submit their VAT return to the FTA at the end of the allotted taxation period failing which they may attract penalties. The allocated tax period of a business is generally a month or a quarter as per the turnover. VAT returns have to be filed within 28 days of the lapse of the tax period to avoid fines. Businesses hire VAT Filling and Accounting Services in Dubai/UAE who take care of taxes while they can concentrate on their core business.
How to Register for VAT in UAE
The first step for a business is to determine its tax obligation before registering for VAT. As explained, a business must apply for VAT registration if its turnover is 375,000 AED or more in a year. At the same time, any business must register for VAT even if it has not reached the threshold turnover yet, but is expected to in 12 months. Expert UAE Taxation and VAT Services can help to determine the tax obligation of a business before proceeding to register for VAT.
The FTA has facilitated online VAT registration for businesses in UAE. However, businesses need to furnish detailed information when registering for VAT. Processing documents for VAT registration can be a challenging task. Any incorrect entry can result in delays, penalties or rejection of company VAT registration.
Milestone Project Management Systems (MPMS), a Dubai based Tax Consultancy Services company, offers expert VAT registration services for any business. A trusted, professional and reliable VAT registration consultancy, MPMS communicates with the FTA on your behalf and makes VAT registration simple and fast. Here is how MPMS will facilitate VAT registration for your business:
- Documentation:
Our experts will guide you through the required documentation. Our professionals ensure your paperwork is correct and complete, while you can concentrate on your core business.
- Calculating Tax Obligation:
At MPMS, our consultants can help you assess your tax liabilities. You must calculate the taxable turnover for your business before registering for VAT.
- Compliance:
Our taxation experts at MPMS ensure that business records submitted for VAT registration comply.
- Handling communications with FTA:
MPMS will handle communication with the FTA regarding the registration process on your behalf. At the end of successful VAT registration, you will receive a VAT Registration Number or TRN.
MPMS offers taxation and VAT (Value Added Tax) services in Dubai and UAE as below:
- Determine the VAT and tax liability of the business
- VAT registration in Dubai
- Expert advice on VAT rates
- Provide updates on VAT Rules and Regulations
- Implement VAT updates on time
- Maintain VAT records
- File VAT returns
- Handle VAT penalties
Frequently Asked Questions
What goods and services are exempt from VAT in Dubai?
Some goods and services are exempt from VAT in Dubai. They are:
- Life Insurance and Life Reinsurance
- Interest on forms of lending such as credit cards, finance leasing and loans
- Equity or debt security
- Products that do not have a fee, commission or discount
- Bare Land without any construction
- Sale or rent of residential buildings after the first supply
- Domestic flights within UAE
- Busses, trains, and other passenger transportation
How do I submit VAT to UAE?
The VAT must be submitted to the UAE government through the online portal of the Federal Tax Authority (FTA). UAE/Dubai Tax Consulting Services can help you calculate and file VAT returns.
Is VAT applicable on services in UAE?
Yes, VAT is applicable at a 5% tax rate on services including private higher education institutions, cosmetic surgeries, hotel accommodations including serviced apartments and more.
Is VAT registration mandatory in UAE?
VAT registration is mandatory for companies that have a turnover of 375,000 AED in 12-months.
Who is eligible for VAT registration?
Companies that have a taxable turnover above 187,500 AED can voluntarily register for VAT in Dubai/UAE. You can avail of MPMS Vat Registration Solutions in Dubai/UAE to find out if you are eligible for VAT registration.
What are the 3 types of VAT?
There are three types of VAT depending on the supplies.
- Standard-rated VAT: The standard VAT taxation rate in Dubai and UAE is 5% which is incurred at every step of the supply chain.
- Zero-rated VAT: VAT may be charged at 0%.
- VAT Exempt: Certain categories of goods and services are not taxed.
When to charge VAT on services?
VAT is not charged on general education services except for private higher education services. Some healthcare services are not exempt from VAT. Hire the services of an expert taxation consultancy to help your business with VAT on services. Vat Consultancy Services Dubai/UAE give advice on VAT charges for services offered by your business.
Can UAE Nationals claim VAT?
Yes, UAE Nationals can claim a refund on the VAT if they are building a new residence in Dubai or UAE.
How often are companies required to file VAT returns?
The Federal Tax Authority (FTA) usually allocates a monthly or quarterly tax period as the annual turnover. However, the FTA may allow for a longer or shorter taxation period depending on the business.
Is VAT applicable for free zone companies in UAE?
Free zones are not considered as part of the UAE and are therefore exempt from all taxes.
How to apply for vat registration in UAE?
VAT registration in Dubai or UAE is done online through the Federal Tax Authority VAT portal.
How to cancel VAT registration in UAE?
VAT registration can be canceled online through the business VAT account in the Federal Tax Authority VAT portal
How to change address in VAT registration certificate in UAE?
The address of a business can be updated online through the FTA VAT portal. Any change in business account details and circumstances have to be notified to the FTA failing which heavy penalties may be imposed.
How to change VAT registration details UAE?
VAT registration details can be changed or updated online through the FTA portal. However, it will require approval from FTA before the updates can come into effect.
How to cancel VAT registration online?
Before a business can cancel VAT registration online, the business entity must satisfy the criteria to deregister from VAT.
How much does VAT registration cost?
Registration for VAT with the FTA is free on the FTA portal. However, VAT consultants in Dubai/UAE may charge for their services rendered to a business.
What is vat registration certificate?
A VAT registration certificate is a necessary document that contains information about the VAT status of a business. It contains a VAT Transaction number or TRN which a business should declare when collecting VAT from the goods and services it offers.
