Are you a business owner in the United Arab Emirates and looking to set-up your company for VAT registration in UAE? You’ve come to the right place! VAT is becoming increasingly important for businesses, so it’s essential that you take steps to ensure your organization is properly registered. In this blog post, we will provide comprehensive information about what steps are necessary when applying for VAT registration in UAE. We will walk through topics such as the documents needed, who qualifies and the cost involved with setting up your company properly with VAT. So, if you’re ready to learn how it all works, let’s dive right into it.
Things to Consider Before Registering VAT
First, it’s important to understand who is eligible for VAT registration. To apply, your company must meet certain criteria set by the Federal Tax Authority (FTA). These criteria include having an annual turnover of 375,000 AED or more and providing goods/services in the UAE. If your company meets the criteria, you can proceed with the company registration for VAT in UAE process.
The application itself requires a few key documents that must be provided in order to apply. These documents include a valid passport or Emirates ID, as well as a copy of your business’s Trade License, Memorandum of Association and Articles of Incorporation. These documents need to be provided with the application form, which can be filled out online on the FTA’s website. Once the application is submitted, you will receive a confirmation number, which you can use to track the status of your application.
The cost of the registration can vary depending on your company’s size and turnover. The FTA has set a threshold of 15,000 AED for companies with a turnover of less than 1.5 million AED. Companies that have a higher turnover must pay a fee based on the value of their turnover. Again, this fee is determined by the FTA and can vary from company to company.
Once you have submitted your application, it can take several weeks for the FTA to approve your company’s VAT registration. Once approved, you will receive a VAT TAX Registration Number, which you can use to start charging your customers VAT.
Introduction to VAT Registration in UAE
Once a business has been registered for Value Added Tax (VAT) in the United Arab Emirates (UAE), it must comply with certain obligations. The main obligation is to register for, collect and submit value added tax (VAT) returns to the Federal Tax Authority (FTA). The FTA will assess the returns and determine the amount of VAT due or to be refunded.
The VAT registration in UAE procedure process involves completing an online registration form and submitting the required documents. The FTA will review the application and provide a tax registration number if approved. Once registered, all businesses must maintain a full record of their business activities that affect VAT and submit tax returns regularly.
The following items should be taken into account when doing company registration for VAT in UAE:
• Business and corporate structure – This should include company name, address, contact details and other information related to the business.
• Accounting systems – Businesses must maintain accurate records of their business activities and the VAT due on them.
• Tax registrations – Companies must register for VAT with the FTA and obtain a tax registration number.
• Tax returns – Businesses must submit regular tax returns to the FTA and pay any taxes due.
• Tax compliance – Companies must comply with all rules, regulations and requirements of the FTA.
By taking these steps, businesses can be sure that they are complying with their VAT obligations and taking advantage of the benefits it brings. When businesses comply with the rules of the FTA, they can enjoy the benefits of a lower cost of doing business and improved efficiency.
How to Apply for VAT Registration in UAE:
The process of registering for a Value Added Tax (VAT) in the UAE is straightforward and easy. All companies need to apply for VAT registration to be in compliance with local regulations. Here is a step-by-step guide to help you get started:
Step 1: Gather Necessary Details
To apply for a VAT registration, there are certain documents required for vat registration in UAE such as your company’s name, address, contact details, and tax return information.
Step 2: Submit VAT Registration Application
You can submit the required documentation to the Federal Tax Authority (FTA) either online or through their offices. When submitting the application, you will need to provide a valid Emirates ID and a valid passport for the contact person listed in the application.
Step 3: Receive VAT Registration Number
Once the FTA has approved your application, you will receive a VAT registration number. The registration number should be used for all future filings and transactions related to the Value Added Tax in the UAE.
Step 4: File VAT Returns
Once you have received your registration number, you will need to file periodic returns with the FTA. These returns should include any sales and purchases you have made during the period, as well as any VAT due or refundable.
By following these steps, you will be well on your way to registering for VAT in the UAE. Remember to keep all relevant documentation safe and up-to-date, and be sure to file your VAT returns on time. If you need help with the process, Tally Solutions can provide expert support and advice.
VAT Turnover Calculation for Registration in UAE
The UAE Federal Tax Authority (FTA) has made it mandatory for all businesses in the UAE to register themselves for VAT. The registration is based on the business’s turnover or their expected turnover in the next 12 months.
The FTA requires all businesses to calculate their turnover for VAT registration purposes. To determine their turnover, businesses must use the following formula:
Turnover = Total Value of Sales + Other Income – VAT Refunds
The other income includes any money made from renting or leasing property, services and assets. The VAT refunds are amounts of VAT paid by a business that were later refunded by the tax authority.
Businesses must also keep in mind that the turnover calculation is based on the currency that they use to conduct their business. For example, if a business trades in both AED and USD, its turnover calculation must be based on the currency used in a majority of its transactions.
It is important to note that all businesses must update their turnover calculation every six months and register for VAT if their turnover exceeds the registration threshold. The FTA will consider a business’s turnover as it existed six months prior to the date of applying for registration.
Applying for VAT registration in UAE is a straightforward process that requires certain documents and fees. As long as you meet the criteria set by the FTA and provide the necessary documents, your company should be approved for VAT registration in no time. If you have any questions or need further guidance, engaging a VAT registration UAE consultant in UAE can be extremely helpful. They will ensure that your business meets all the necessary qualifications and takes the proper steps for successful registration.