UAE VAT Registration
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One of the most prosperous commercial markets in the world and a top choice for foreign investment is the United Arab Emirates (UAE). If you are an owner of a business in the United Arab Emirates or intend to establish a company there, you need to determine whether your firm has to be registered under VAT legislation. SS&CO provides a range of VAT services, including UAE VAT registration services, through its team of professionals.
Your firm has been approved by the government if it is registered under UAE VAT law. Whether or not your company has to register for VAT in the UAE will depend on the amount of money it makes. SS&CO provides one of the best VAT registration services available in the UAE. We will guide you through the process of registering a VAT in the United Arab Emirates.
How to sign up for UAE VAT
The following documents must be provided in order to register for VAT in the United Arab Emirates. The process and technique for doing so are rather simple.
- A duplicate of your business permit
- The Memorandum of Association (MOA) of the firm
- A duplicate of the Emirates ID that the partners and owner possessA duplicate of the Emirates ID that the partners and owner possess
- Information about the company and the bank account
- The revenue summary for the preceding twelve months
- A duplicate passport for the company’s owners and partners
- The business’s organisational structure and action plan
UAE VAT Registration Types
A business must formally register for VAT.
If the total amount of the company’s taxable imports and supplies during the previous 12 months exceeds the required threshold; or If the necessary registration threshold is anticipated to be exceeded within the next 30 days.
For a business, voluntary registration is an option:
if the entire amount of its imports, taxable expenses, and taxable supply during the preceding year surpasses the threshold for voluntary registration; or
if it is anticipated that in the ensuing 30 days, the total of the company’s taxable imports, taxable supplies, or taxable expenses would exceed the voluntary registration threshold.
Companies with annual turnover between AED 187,500 and AED 375,000 are voluntarily required to register and account for VAT, but those with annual income exceeding AED 375,000 are required by law to do so.
VAT Group Registration in the UAE
To pay a single tax, two or more businesses must create a group and go through the VAT Group Registration process. The entities in question obtain a unified VAT number upon registration under the Group VAT scheme, enabling them to file a single return. Individuals and businesses with social and economic ties can function together as a single VAT entity by forming a VAT group. For the parties to form a VAT group, they need to meet the following requirements:
Each participant must have a permanent establishment in the United Arab Emirates. A “fixed establishment” is a location where a business is formally registered in the country or where important management decisions are made and duties are carried out.
It is important to establish a social, economic, or legal connection between the pertinent parties.
The following are the advantages of VAT Group Registration for businesses:
- All companies that are part of a VAT group will be treated as “ONE” entity for VAT purposes. Businesses would benefit from this as it would simplify tasks like VAT accounting and monitoring, such as creating and filing VAT returns, which are generated and filed at the group level as opposed to the company level.
- Any supply made inside the entities of a VAT group are regarded as Out of Scope or ignored supplies and are not subject to VAT. However, supplies from the VAT group to organisations outside the VAT group are subject to VAT.
Industries not subject to VAT
- Products and services falling under the following categories will be free from VAT:
- Certain financial services are offered (explained in VAT statute)
- Household Assets
- Local passenger travel on bare land
UAE VAT Penalties
Businesses would face significant FTA VAT fines should they violate UAE VAT laws. To avoid VAT fines and penalties, businesses must continue to comply with the FTA’s requirements for VAT compliance. They need to speak with a tax expert before implementing VAT within the company.
The penalties for late VAT registration is AED 10,000.
Late VAT payment penalties arise when the tax declared in the tax return form is not paid within the term stipulated by the tax legislation. The following will be the penalty for failing to pay VAT on time:
The following day after the tax due date, there is a penalty of 2% of the unpaid tax.Starting the following month, there will be a 4% monthly penalty applied to any amount that remains unpaid.Maximum 300 percent penalty for each calendar month that the payment deadline is missed.
Turnover calculation for UAE VAT registration purposes
The turnover threshold in the United Arab Emirates for VAT registration is DH 375,000 or more if registration is required, and DH 187,500 or more but not DH 375,000 if registration is voluntary.
When passing the threshold, the following supplies need to be taken into consideration:
- The basic rate of 5% VAT is applicable to supplies made to customers.
- Imported goods and services Reverse charging servicessupplies to customers with a zero VAT charge. SS&CO has been a significant business consultant, offering worldwide accounting and tax services to commercial enterprises. Our VAT specialists will help your company register for VAT in the United Arab Emirates and will help you structure it as economically as possible.
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Sidra Salman
- Ms. Sidra Islam, Founder and Managing Director
- Tel: +971 50 262 0170
Salman Sharif
- Non-Executive Director
- Tel: +966 56 0099 497
Mubashir Islam
- Senior Manager
- Tel: +971 50 262 0170
Zainab Malik
- Senior Financial Analyst
- Tel: +971 50 262 0170
Mian Ahmad Farhan
- Partner Audit & Assurance Services
- Tel: +971 50 262 0170
Gideon Kaddu
- Senior Accounting Associate
- Tel: +971 502 182 897
