The introduction of Value Added Tax (VAT) in the United Arab Emirates (UAE) has resulted in substantial transformations in the taxation framework for businesses. To tap into growth prospects and ensure compliance with the regulations, businesses must take a crucial step of VAT registration. Comprehending the criteria for VAT registration is of utmost importance as it dictates whether a business is required to register mandatorily or can do so voluntarily.
In this comprehensive guide, we will delve into the criteria that necessitate VAT registration in the UAE and provide a step-by-step process for businesses to easily register through the Federal Tax Authority’s online portal. Additionally, we will explore the importance of seeking Expert VAT Services in UAE and the benefits it brings to businesses in terms of compliance, cash flow management, credibility, and competitive advantage. By equipping yourself with the knowledge and tools presented in this article, you will be better prepared to navigate the VAT registration process in the UAE and ensure your business’s seamless compliance with the tax laws, leading to enhanced growth and success.
Know whether your business need VAT registration or not?
VAT registration in the UAE is mandatory for businesses meeting specific criteria. These criteria encompass:
• VAT is mandatory for businesses in the UAE whose taxable supplies and expenses in the past year have surpassed the mandatory threshold of AED 375,000.
• VAT is applicable to businesses that expect their taxable supplies and imports to exceed AED 375,000 in the upcoming 30 days. It’s important to highlight that this threshold does not pertain to foreign companies. Moreover, businesses meeting either of the following conditions must opt for voluntary VAT
• The total value of taxable supplies and imports or taxable expenses during the last 12 months exceeds AED 187,500.
• It is expected that the taxable supplies and imports will exceed AED 187,500 in the next 30 days.
By considering these criteria, you can determine whether your business is subject to VAT registration in the UAE.
Easy Registration of VAT
To register for Value Added Tax (VAT) in the United Arab Emirates, businesses can follow a straightforward two-step process through the Federal Tax Authority’s online portal.
Step 1: Set up an e-service account on the Federal Tax Authority’s website.
Step 2: Access the newly created account and complete the VAT registration process.
By following these simple steps, unregistered businesses can easily register for VAT and comply with the tax regulations in the UAE. To successfully register for VAT in the UAE, businesses must create an e-Services account approved by the Federal Tax Authority (FTA). Follow these steps to set up your e-Services account
Step 1: Set up an e-service account:
1. Begin by visiting the Federal Tax Authority website and click on the “Sign-up” button on the home page. Provide essential details like your email ID, password, and security code.
2. Once you submit the form, an automatic verification email will be sent to your registered email ID.
3. Log in to your newly created e-Services account using your username and password.
Step 2: Complete the VAT registration process:
After creating your e-Services account and logging in, you can proceed to register for VAT by following these steps:
1. The “Get Started Guide” will appear, providing specific requirements for VAT registration in the UAE. Carefully read and understand the guide to avoid errors.
2. Click “Proceed” after reviewing the guide, and the VAT registration form will be presented, divided into nine sections
• Entity details
• Identification details
• Eligibility details
• Contact Details
• Business Relationships
• Bank details
• Additional details
• Authorized signatory
• Review and declaration
3. Complete all mandatory fields within each section, ensuring to save your progress as you fill out the form.
4. After providing all the necessary details, click “Save and Review” to review your answers before submission.
5. Now thoroughly review the form and ensuring the accuracy of the provided information, proceed by clicking “Submit for Approval.” Once submitted, your application status on the Dashboard will be updated to “Pending,” and you will receive a confirmation email acknowledging the receipt of your application
By following these steps and submitting accurate information, you can smoothly register for VAT in the UAE and comply with the tax regulations.
Importance of getting VAT Registration Services in UAE
VAT Services in UAE holds significant importance for businesses due to various compelling reasons. Some of these reasons include:
1. Ensuring Compliance: VAT registration is mandatory for businesses meeting specific criteria. By getting VAT Consultancy Services in Dubai, businesses can comply with the law, preventing potential penalties and legal complications.
2. Efficient Cash Flow Management: VAT-registered businesses can reclaim the VAT paid on their purchases. This helps to optimize cash flow, reducing overall costs and facilitating better financial management.
3. Enhanced Credibility: VAT registration signals professionalism and legitimacy to customers and suppliers. It establishes the business as a reputable entity that abides by tax regulations.
4. Avoiding Penalties: Failure to register for VAT can result in significant penalties and financial burdens. By completing the registration process along with experts, businesses can avoid unnecessary costs and legal repercussions.
5. Competitive Advantage: VAT-registered businesses can claim back input VAT on goods and services, allowing them to offer more competitive prices in the market and gain an edge over non-registered competitors.
Documents required for registration of VAT
When registering your business for VAT tax in the UAE through the FTA e-services portal, you will need to submit the following documents:
• A copy of your business trade license.
• Passport copies of the partners or company owners, as declared on the license.
• Copy of the company’s Memorandum of Association (MOA).
• Bank account details.
• Contact details of the company.
• Emirates ID copies of the business partners or owners.
• Description of the nature of performed businesses and activities.
• An income statement of last 12 months.
• Details of the taxable expenses of last 12 months.
• Anticipated income and expenditure for the upcoming 30 days after receiving the Tax Registration Number. Ensure that you have all the necessary documents in order to facilitate a smooth VAT tax registration process for your business in the UAE.
Check your application status:
To check the status of your VAT registration in the UAE, follow these steps and familiarize yourself with the relevant terms:
• Access the official website of the UAE Federal Tax Authority (FTA), where you initiated the VAT registration process.
• Use the credentials you created during the registration process to log in to your account.
• Once logged in, navigate to the section that allows you to review the progress of your VAT registration application.
Understand the application terms
a) Drafted: This status indicates that your registration form has not been completed or submitted yet.
b) Pending: If your application status is “Pending,” it means that the FTA has received your registration form and is either reviewing it or waiting for additional information from you.
c) Suspended: When your application is “Suspended,” it means that the FTA has received your registration form, and a Tax Registration Number (TRN) has been issued for your business. Additionally, your tax group registration, if applicable, has been approved.
d) Rejected: If the FTA has rejected your registration form, it means that your application was not approved, and you will need to address the issues or reapply if necessary.
e) Approved: When your registration status is “Approved,” it signifies that your VAT registration has been successful, and your business is now officially registered for VAT.
By checking your application status and understanding the provided terms, you can keep track of your VAT registration progress and ensure compliance with the UAE’s VAT regulations. Seeking professional VAT registration services can be advantageous for businesses, as it guarantees a streamlined registration process, adherence to the regulations, and expert guidance throughout the journey. Unlock the full potential of your business with Bestax’s VAT registration services and embark on a journey of compliance and prosperity in the dynamic landscape of the UAE. Reach out to Bestax today and take the first step towards VAT compliance and growth