VAT registration is the process by which an individual registers with the Federal Tax Authority (FTA). If certain conditions are met, both UAE residents and foreigners can apply for VAT or Excise Tax registration. Only those with a valid TRN (Tax Registration Number) issued by the FTA are allowed to collect and pay taxes in the UAE.
The UAE classifies VAT registration into two types:
A non-resident must register for VAT in the UAE if they supply any goods in the country, regardless of turnover, unless someone else is responsible for paying VAT on their behalf. This applies to both individuals and legal entities.
Any person (individual or entity) who has supplied goods or services worth more than AED 375,000 in the past 12 months must register for VAT.
If someone expects their turnover to exceed AED 375,000 in the next 30 days, they are also required to register for VAT.
A person can choose to register for VAT if their supplies over the past 12 months are above AED 187,500 but below the mandatory limit of AED 375,000.
They can also voluntarily register if they expect their supplies to exceed AED 187,500 in the next 30 days but remain below AED 375,000.
A person can voluntarily register for VAT if their taxable expenses over the past 12 months exceed AED 187,500.
Similarly, they can opt for VAT registration if they expect their taxable expenses in the next 30 days to exceed AED 187,500.
According to the FTA, individuals or businesses that provide 100% zero-rated goods or services can apply for an exemption from VAT registration. They must notify the FTA by filling out the VAT registration form. The FTA will decide whether to grant the exemption based on the application’s validity.
According to the FTA, individuals or businesses that provide 100% zero-rated goods or services can apply for an exemption from VAT registration. They must notify the FTA by filling out the VAT registration form. The FTA will decide whether to grant the exemption based on the application’s validity.
Although the UAE Authorities have made efforts to simplify the VAT registration process, it still comes with its own challenges when applying, filing, or getting registered. The large number of required documents and the need for precise, accurate information can confuse many individuals. Additionally, the FTA often asks for detailed explanations and clarifications, which can be overwhelming for someone without experience.
VAT registration is the process of officially registering your business with the government to operate in production and sales. Once registered, a business can claim back any VAT paid on its purchases and is required to charge VAT on its goods or services. If a business is not VAT registered, it still has to pay VAT on purchases but cannot reclaim it.
Businesses and companies in the UAE that make taxable supplies must register for VAT if their total taxable supplies and imports over the past 12 months exceed AED 375,000 annually.
First, go to the state VAT website and click on the registration tab. Fill in all the required details and attach the necessary documents to submit your registration request.
After submitting, you’ll receive a temporary VAT registration number.
Finally, once the process is completed, you’ll be assigned a permanent VAT registration number
Once VAT registered, businesses can claim back the VAT they pay on goods and services. VAT is the tax you charge on sales (output tax) and the tax you pay on purchases (input tax). If the input tax is higher than the output tax, businesses can claim back the difference.
Excise tax is a tax applied to specific goods and services, such as fuel, alcohol, and tobacco. In the UAE, excise tax applies to items like electronic smoking devices, liquids used in such devices, and sweetened drinks. This tax is paid directly by the businesses selling these goods.
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