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KWS Fintech Services is one of the leading independent specialist VAT firms in the UAE
“Whether you own a small, medium, or established large business, you need to get registered for VAT in UAE under the Emara tax law. Registering your business under the UAE VAT law denotes that your business is recognized by the Government.”
“VAT registration in UAE for your business entity will depend on the income generated from your business. KWS FINTECH SERVICES L.L.C-FZ is one of the leading consultancies in UAE, which offers outstanding VAT registration services in Dubai addition to VAT Booking, VAT accounting, VAT return filing, etc..“
VAT Registration is the process of listing your business with the government as active in production and sales. Charging VAT on any goods or services sold, Paying any VAT due to HMRC. The United Arab Emirates will implement Value-added Tax (VAT) on 1st January 2018. VAT will be introduced at a rate of 5% on goods and services with some limited exceptions including basic food items, healthcare, and education. Federal Decree Law No. 8/2017 and the cabinet and executive decisions offer guidelines on the law governing VAT implementation in the UAE.
Value Added Tax (VAT) is an indirect tax added to goods and services provided by companies and individuals within the UAE. Registered companies and individuals will have to submit a return to the FTA (Federal Tax Authority) monthly or quarterly and pay the tax collected. VAT in the UAE is very similar to VAT implemented in European and other countries around the world.
VAT will be paid only by the final consumer as registered companies will be able to claim back any VAT paid.
Some goods and services such as transport, school fees, and finance commissions and interest are zero-rated or exempt. We are able to provide you with a full list upon request. As well Free zone companies above the stated threshold will have to registration for VAT. Companies that make supplies to foreign companies only, may apply for an exemption.
Zero-rated VAT
- International transportation, and related supplies;
- Exports of goods and services outside the UAE;
- Certain investment grade precious metals (e.g. gold, silver, of 99% purity);
- Supplies of the certain sea, air, and land means of transportation (such as aircraft and ships);
- Newly constructed residential properties.
Exempted VAT
- Local passenger transport
- Bare land – sale and lease
- Residential properties – sale and lease
- Supply of certain financial services
Online VAT Registration, The Following Documents are Required for VAT REGISTRATION
- Email ID
- Mobile Number
- Trade License
- Memorandum of Association (MOA) – [Not Mandatory for sole establishment]
- Invoices
- Emirates ID
- Passport
- Visa
- Office Address with PO box
- Bank Name
- Bank Account Number
- IBAN Number
- Bank Address
VAT Registration Process
- If the total value of its taxable supplies and imports or taxable expenses in the preceding 12 months surpasses the voluntary registration threshold,
- If the business foresees that the total value of its taxable supplies and imports or taxable expenses will exceed the voluntary registration threshold in the next 30 days.
The threshold for voluntary registration of a company is AED 187,500.
Mandatory Registration
It is mandatory that a business must register for VAT:
- If the total value of its taxable supplies and imports exceeds the required registration threshold over the previous 12 months
- If the business expects that the total value of its taxable supplies and imports will exceed the obligatory registration threshold in the next 30 days.
The threshold for mandatory registration of a business is AED 375,000. But this threshold is not applicable to foreign organizations.
How to Register for VAT in UAE?
The registration for VAT in UAE is an online process that can be done through the VAT registration portal available on the website of www.tax.gov.ae.
Once the application is submitted, the FTA will review the information and documents submitted and approve the application if everything has met the requirements, and it will allow a Tax Registration Number (TRN).
Once the VAT registration process is over, the Ministry of Finance will issue a VAT certificate which is an official confirmation from the authority that the business is registered under the VAT Law in the UAE.
Penalty for Non-Registration under VAT
Any company that fails to finish the VAT registration process under the deadline set by the Federal Tax Authority or if the company fails to submit registration after crossing the mandatory threshold limit of AED 3,75,000 is liable to pay a fine of AED 20,000.
The Importance of VAT Registration
TRN Verification is a time-efficient, money-saving, and productive method for both the public and private sectors. It can help with:
Claiming back paid taxes that are charged on the purchase, manufacture, and processing of a product or merchandise. Providing a refund for companies who have registered under VAT and have acquired a valid TRN. Recovery of business purchases by the buyer through VAT. Paying for utilities like electricity and water for commercial use. According to the VAT Law of the UAE, TRN Verification of all tax documents is necessary for companies, and these are:
- Tax Invoice
- VAT Return
- Tax Credit Note/Record
- Other relevant documents
What are the Benefits of TRN?
TRN Verification is a compliance measure created under the UAE VAT Laws. When a company completes the TRN Verification process, numerous benefits are provided which are listed below:
- It tracks all the transactions made by numerous buyers and establishments
- It provides a unique identity for businesses
- It offers easy communication with the FTA
- It legalizes the business on the tax invoice
- It organizes the collection of documents related to taxes
- It highlights the compliance aspects of the company
- It creates investor and shareholder confidence
- It mitigates any risk of non-compliance to avoid penalties
- It simplifies communication between the buyer and seller
- It showcases an organized process of transactions for businesses
Frequently Asked Questions
VAT registration is the process of officially enrolling your business with the tax authorities as a VAT-registered entity. It allows you to collect VAT on your sales, claim input VAT on your purchases, and comply with VAT regulations.
The threshold for VAT registration varies by country. In general, businesses that exceed the specified turnover threshold within a given period are required to register for VAT. The threshold can be based on either annual or rolling turnover. Small businesses or businesses that do not meet the threshold may have the option to voluntarily register for VAT.
You should check the VAT regulations and guidelines provided by your country’s tax authority or consult with a tax professional to determine if your business meets the requirements for VAT registration. The turnover threshold and other criteria for registration can vary between jurisdictions.
VAT registration offers several benefits, including:
- Ability to collect VAT on sales, which can help in recovering VAT paid on purchases.
- Enhanced credibility and professionalism in the eyes of customers and suppliers.
- Ability to claim input VAT on business-related purchases, reducing overall tax liability.
- Compliance with legal requirements and avoidance of penalties for non-registration.
The process for VAT registration varies by country. In general, you will need to complete a VAT registration form provided by the tax authority and submit it along with the required documents. These documents may include proof of identity, business registration documents, financial statements, and other supporting information. Some countries may also require a physical inspection of your business premises.
Many tax authorities provide online platforms or portals for VAT registration, allowing businesses to register electronically. This provides convenience and reduces processing time. Check with your local tax authority to determine if online registration is available and the specific requirements for online registration.