VAT Registration for UAE Businesses

The Value Added Tax (VAT) with five percent tax rate has been launched in UAE on January 1, 2018.

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.

Those businesses who miss the deadline of VAT registration will have to pay a fine as described in the Administrative Penalties stipulated in Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

The registration applications are accepted through the official online portal  You can get help and information regarding VAT enrollment from 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 (extended to January 1, 2018).

Late Registrations for VAT

The penalty of Dh20,000 will be levied from the companies that are eligible for VAT but have not registered yet.

These businesses will also not be able to charge VAT on their supplies without the tax registration certificate or TRN(Tax Registration Number).

The businesses who have provided incomplete or incorrect registration details are also not given their TRN or registration certificates by the FTA. These businesses will have to pay fine of Dh20,000.

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.

The deadline for voluntary VAT registration was the same as the deadline for standard registration, however, businesses applying for voluntary registration do not have to pay a fine/penalty for late registrations.

Businesses are required to upload their annual financial statements or any other proof of their annual turnover 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.

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 (agent) 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.

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 a 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 of the sale of goods and services in compliance with the law.

VAT invoices are also needed by the businesses 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 the amount of 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 by filing tax returns on a quarterly basis. Value added tax can be calculated by the formulae Input Tax – Output Tax.

Output Tax is the percentage of selling price received by the seller on the sale 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 online. VAT registered businesses are required to submit or file VAT return usually by the end of each quarter, following the end of the reporting period 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 the PDF Help Guide for Step by Step VAT Registration Process