UAE VAT Registrations for Businesses Open till Dec 4

The Value Added Tax (VAT) with five per cent tax rate is scheduled to be launched in UAE in the starting of the next year. However, the VAT registration for eligible businesses have already begun and will continue till December 4. That means, all the businesses that are liable to register under VAT (having an annual turnover of Dh375,000 or more) are required to submit their registration applications latest by this date.

The registration applications are being accepted through the official online portal which will stay open around the clock. The FTA has also clarified that all the help and information regarding VAT enrollment are available on the website.

UAE VAT Registration Timeline (Schedule)

All businesses that come under VAT liability must submit their registration applications on or before the dates mentioned below.

Businesses with an annual turnover of Dh150 million or more need to register before October 31, 2017. Businesses having an annual turnover between Dh10 million and Dh150 million should register latest by November 30, 2017. All the remaining businesses with turnover more than or equal to Dh375,000 must apply for VAT registration on or before December 4, 2017.

The registrations are currently open for all types of businesses that satisfy the threshold requirements. Manu Nair of Emirates Chartered Accountants Group clarified that only the last date of registration is different based on the annual turnover of respective organizations.

A penalty may be levied on the companies that are eligible for VAT but do not register in time.

The FTA is also allowing voluntarily registrations under VAT, for which the limit is Dh187,500. All the businesses (small & startups) having an annual turnover more than this limit but less than the normal VAT registration threshold and dealing in taxable supplies and/or imports can apply for voluntary VAT registration.

“This opportunity enables startup businesses that do not have the required income to optionally register for VAT,” the FAT explained.

“The FTA is keen to give the business sectors sufficient time to adapt their operating systems to the requirements of the VAT system,” Khalid Al Bustani, director-general of the FTA said in a statement.

As per the official report, businesses will be required to upload their annual financial statements or any other proof of their annual turnoverx while submitting their VAT applications. “Even if the last 12 months’ turnover is less than the mandatory threshold Dh375,000, but expected turnover within the next 30 days is more than Dh375,000, still the business has to register,” said Nair.

There are some special considerations and requirements to fill the VAT registration applications.

If one or more partners of your company are also engaged (as a partner) in any other UAE based company, then you are required to mention the name of all such companies in your application.

A company is allowed to choose a manager who will represent the company in all the VAT (tax) related matters. The personal details and contact details of the manager should be provided in the VAT application by the company.

As you may already know, VAT also has a provision for group registration, in which multiple entities of the same business or multiple companies under the same management/control can apply for tax group registration, given that they have a valid proof of relationship between said entities. The management must choose a representative member (main company) in order to register as a VAT group.

The name of the company, as well as the name of the manager/owner, should be filled in Arabic in the registration application. The application should also contain the details of the bank in which the company has a business account. After successful submission of application, a tax identification number (TRN in case of group registrations) will be provided.

VAT Registration: https://www.tax.gov.ae/getting-ready-for-vat.aspx

Sign up for VAT Registration at FTA Online Portal: https://eservices.tax.gov.ae/en-us/signup

Invoices

A VAT Invoice is a type of document that must be generated and issued by only VAT registered the business. The invoice can be treated as a documentary evidence on the sale of goods and services in compliance with the law.

VAT invoices also needed by the business as a proof of evidence to support VAT credit claims, i.e. VAT incurred on the acquisition of goods and services for the purposes of the business can only be claimed if the business holds a valid VAT Invoice from the vendor. Through invoice, the end consumer is able to know that how much VAT paid by him at the time of consumption of goods and services.

Calculation and reporting VAT

After the registration under VAT, registered businesses must have to pay collected VAT to the tax authorities either monthly or on a quarterly basis. Value added tax can be calculated by the formulae output tax – Input tax.

Output Tax is the percentage of selling price received by the seller on the selling price of his final product.

Input Tax is the percentage of cost price incurred by a buyer to purchase raw materials to produce final product/ good

VAT = Input Tax – Output Tax

In most jurisdictions, the process of filing and submitting VAT return is completely done through online. VAT registered businesses are required to submit or file VAT return usually by the end of the calendar month, following the end of the reporting period, either monthly or quarterly.

What is the meaning of VAT number?

At the time of registration for VAT, the businesses or individual will be assigned a unique 11 digit number which will serve as CST Number/ VAT Number/ TIN Number for the business.

Download PDF – User Manual for VAT Certificate