The Value Added Tax (VAT) was introduced in UAE in the year 2018. The standard VAT rate in UAE is 5%, which is comparatively very low across the globe. However, certain goods and services enjoy reduced VAT rates and even exemptions from VAT. The VAT was implicated after detailed study and many rounds of consultations from various experts and departments.

Registration under the VAT laws is a confirmation that the business is acknowledged by the government and the commercial activities are in accordance with the government norms. A VAT registered firm is authorized by the government to collect the VAT by supplying certain goods and services and remitting the tax collected to the government.

The companies and firms registered under VAT laws are permitted certain activities which they have to abide anyhow:

  • Charge VAT on goods and services those are taxable
  • Claim Input Tax Credit on VAT that was earlier paid on purchases and will be deducted from VAT liability on the sale of those particular goods
  • Remitting the payment of VAT to the government
  • Periodic filing of VAT return

It should not be considered that the liabilities of the firms are confined to the above-stated points only, all companies have to align their business structure in accordance with the compliance requirements of the government of the UAE, like updated books of accounts, tax documents like Tax invoice, credit notes and debit notes, all inward and outward supplies, etc. are necessary to be maintained as per the Authorities directives.

Who is required to register under VAT?

It is not at all mandatory for all businesses supplying goods and services to register under VAT. The VAT registration is optional and becomes mandatory under certain circumstances. Those business and companies which crosses the defined aggregate turnover annually are required to register under VAT law. The companies can seek exemption from VAT under specific conditions.

Registration under VAT in UAE can be categorized into the following:

  • Mandatory VAT Registration
  • Voluntary VAT Registration
  • Exemption from VAT Registration

Process of VAT Registration

The process of VAT registration is simple and local companies can get assistance from the accountants in the UAE to apply for a VAT number.

Any business which crosses the defined limit of annual turnover, it becomes mandatory for the company to register under VAT law. The Federal Tax Authority has facilitated its portal for online registration of VAT. It is important for the company and its management to know about the process of VAT registration.

Having knowledge about the registration process helps in saving time, money, and energy and the process becomes easier to complete. Here is the outline of how to apply online for the VAT registration.

  • Creation of e-Service Account
  • Login to your e-Service Account

VAT Registration Form: The form carries 8 sections, which needs the following details to be furnished by the applicant

  • About the applicant
  • Details of the applicant
  • Contact details
  • Banking details
  • Business relationships
  • About the VAT registration
  • Declaration
  • Review & submit

Documents required for registering under VAT in UAE

  • Trade license
  • Certificate of registration
  • Partnership agreement/Article of Association showing ownership of the business
  • Copy of passport of the manager
  • Detail of manager
  • Office location of the company
  • Contact details
  • Details of Bank account
  • List of other businesses of the directors/partners in UAE along with the photocopy of the trade license

Declaration about:

  • Business activities of the applicant
  • Estimated financial results
  • Last 12 months turnover
  • Expected turnover of next month
  • Imports and exports
  • Customs registration

Why choose PMC Solutions FZCO?

Registration of VAT requires a strong understanding of local corporate affairs and tax procedures. PMC Solutions FZCO offers detailed information on the introduction of the value-added tax in the UAE. With immense experience and knowledge in company formation in UAE, PMC Solutions FZCO can help foreign entrepreneurs who are keen to set up companies and interested to register them under VAT law.

Our team of tax advisors provides multi-focal support to the clients in obtaining the VAT registration number. We extend our support in the following services:

  • Advice on types of VAT registration
  • Complimentary assessment of VAT registration
  • Supervision on the documentation required
  • Translation services
  • Review of registration-related documents
  • Submission of application forms
  • Set up on online submissions portals,
  • Managing correspondence with tax authorities.

Contact us if you are willing to open a company in the UAE. Our team of professionals will be happy to help you with the company incorporation process.