The United Arab Emirates (UAE) VAT is a tax on consumption charged on all items and services sold within the country. Suppose your company is located in the UAE or you’re planning to establish a company in the UAE and are a resident of the UAE. In that case, you might be required to sign up to pay VAT if your taxable imports and supplies exceed a specific threshold.
To be registered as a holder of VAT Registration within the UAE to be eligible for VAT registration in the UAE, you’ll be required to comply with these steps:
- Find out if your company is eligible for registration for VAT. In the UAE the UAE, companies that have an annual taxable turnover of more than AED 375,000 annually must register for VAT.
- Get the documents you need. To register for VAT, you’ll require these documents.
- Trade license
- Emirates ID or the passport of the business owner(s)
- Application for VAT registration form
- Complete your application for VAT application. You can fill out your VAT Registration form on FTA’s (FTA) e-Services portal or in an FTA customer service center.
- Wait for approval. After you’ve submitted your VAT Registration request and received approval from the FTA will examine the application and decide whether you’re qualified to be registered for VAT. If your registration application gets accepted and you are approved, you will be issued an official Certificate of VAT Registration.
- You can charge VAT on your sales. Once you’ve registered your business for VAT, you’ll have to start charging VAT on sales at the applicable rate (currently at 5%). It is also necessary to regularly submit VAT Returns to the FTA to document the VAT Registration you’ve earned and any VAT paid on purchases.
It is important to remember it is possible to be a challenge. It is recommended to consult an experienced tax professional to ensure that you’re adhering to UAE VAT laws.
Tax De-registration for VAT in UAE
In the United Arab Emirates (UAE), the businesses licensed for the tax of value added (VAT) can de-register for VAT if they satisfy specific requirements. To de-register VAT, companies must notify the Federal Tax Authority (FTA) and submit a de-registration application using the FTA’s electronic services portal.
To be qualified to apply for VAT Registration, A company must fulfill the following requirements:
- The company should only have tax-deductible supplies or imports within the last 12 months.
- The business should refrain from receiving tax-deductible imports or stores during the following 30 days.
- The company must not have any tax obligations or penalties.
If a business complies with the requirements, it may apply for de-registration through the de-registration form available on the FTA’s online portal for services and submit it with any supporting documents required. The FTA will examine the application and may require additional documents or information before deciding on de-registration.
If the de-registration approval is granted and the business is approved, it is no longer obliged to invoice VAT for its products and pay the VAT for imports and will not be required to submit VAT returns. However, the company may remain necessary to keep certain documents for a certain period if they are required to verify or audit reasons.
GST Return File Filing within the UAE
Tax Return Filing is an approach by which businesses must report how much VAT they paid on sales and how much VAT they charged on their purchases. VAT returns are usually filed regularly, for instance, each month or quarter, based on the laws of the country where the business is situated.
Within the United Arab Emirates (UAE), VAT is administered via the Federal Tax Authority (FTA). Companies registered to collect VAT must submit VAT returns to the FTA regularly. VAT returns must be filed electronically using the FTA’s electronic services portal.
To prepare a VAT Registration report in the UAE, the business will have to:
- Take all necessary documentation, such as invoices, receipts, and other documentation of purchases and sales, in the time frame of the transaction.
- Utilize this guideline to calculate the amount of VAT applied to sales and all the VAT charged on purchases.
- Log into the FTA’s e-Services portal, and then go to the section for filing VAT returns.
- Input the necessary information that includes your total VAT on sales and all VAT owed on purchases.
- Complete a VAT form.
It is important to remember that businesses must submit their VAT returns within the date set in the FTA. If a company doesn’t complete its VAT return by the specified time, it could be subject to penalties or fines.