VAT Registration UAE Guide For 2023

In the United Arab Emirates (UAE), VAT is a tax on consumption charged on all products and services sold in the country. Suppose your company is located within the UAE, or you plan to open a new company in the UAE, and you are a resident of the UAE. In that case, you might be required to sign up for VAT if the value of your tax-exempt imports or supplies exceeds a specific threshold.

To register to pay VAT Registration within the UAE, You will be required to comply with the following steps:

  1. Find out if your company is eligible to be registered for VAT. In the UAE, companies with an annual turnover greater than AED 375,000 per annum must register for VAT.
  2. Make sure you have the required documents. To be able to register VAT, you’ll need these documents.
  • Trade license
  • Emirates ID or the passport of the business owner(s)
  • Formulary for VAT registration
  1. Fill out your application for VAT application. You can complete your VAT Registration on FTA’s (FTA) e-Services portal or through an FTA customer service center.
  2. Wait for approval. After you’ve completed your VAT Registration form, The FTA will examine the application and decide whether you’re eligible to apply for VAT Registration. If your registration application gets accepted and you are approved, you will be issued an official Certificate of VAT Registration.
  3. You can charge VAT Registration on your sales. Once you’ve registered your business for VAT, you’ll have to start charging VAT on sales at the appropriate rate (currently at 5%). It is also necessary to regularly submit VAT returns to the FTA to record the VAT you’ve earned and any VAT paid on purchases.

It’s crucial to remember that it is possible to be a challenge. It is recommended to consult an expert tax advisor to ensure you’re adhering to UAE VAT laws.

The VAT de-registration process in UAE

Within the United Arab Emirates (UAE), businesses certified for VAT (VAT) can deregister for VAT if they meet specific requirements. To deregister VAT, companies must first notify the Federal Tax Authority (FTA) and then file a de-registration application using the FTA’s electronic services portal.

To be qualified to apply for the de-registration of VAT, the company must fulfill the following requirements:

  1. The company should not have had tax-deductible supplies or imports during the past 12 months.
  2. The business should refrain from receiving tax-deductible imports or supplies within 30 days.
  3. The company should not be in the middle of taxes or penalties.

If a business complies with these requirements, it can apply through the application for de-registration through FTA’s e-services portal and submit it with any supporting documents required. The FTA will examine the application and may require additional documents or information before deciding on de-registration.

If the de-registration is accepted, the company is no longer obliged to invoice VAT for its products and pay tax on imports and won’t be required to submit VAT returns. However, the company may remain necessary to keep certain records for a time when they are needed for verification or audit reasons.

Tax Return Forming for UAE

VAT return filing is an approach by which businesses submit the VAT amount they assessed on sales and the VAT amount they pay on purchases. VAT returns are generally filed regularly, which could be monthly or quarterly, based on the regulations of the country in which the business is situated.

The United Arab Emirates (UAE) VAT is administered via the Federal Tax Authority (FTA). Companies that are registered for VAT are required to prepare VAT returns with the FTA regularly. VAT returns are submitted electronically via the FTA’s e-Services portal.

To prepare VAT tax returns in the UAE, companies will have to:

  1. Collect all documentation needed, such as invoices, receipts, and other documentation of purchases and sales, in the time frame of the transaction.
  2. Utilize this document to calculate the amount of VAT applied to sales and all the VAT charged on purchases.
  3. Log into the FTA’s e-Services portal and then navigate to the section for filing VAT returns.
  4. Fill in the required details, including your total VAT charged on sales and any VAT owed on purchases.
  5. Complete a VAT form.

It is important to remember that businesses must submit their VAT returns before the deadline specified in the FTA. If a company fails to complete its VAT return by the specified deadline, it could be subject to penalties or fines.