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HQ: Floor 8 & 9, City Tower 2, Sheikh Zayed Road, Dubai, UAE

UAE tax registration

A comprehensive overview of the UAE VAT registration services

In a country like the UAE, where many want to set up a business assistance is a must. You need someone by your side who knows about the UAE tax registration.

In this article, you will learn everything about what UAE tax registration is. Let us observe:

1. An overview

2. VAT registration services for businesses in Dubai

3. VAT registration services available in Dubai

4. How to apply for the UAE VAT registration?

5. What you should know about VAT registration in the UAE

6. VAT registration in the UAE: Frequently asked questions

7. How can Connect Group help you?

1. An overview

UAE tax registration services assist your business in collecting tax on behalf of the UAE government. As a foreign investor, you might want to start a new business in Dubai. With its lucrative market opportunities, supportive workforce, strategic location, and access to international markets, Dubai is an excellent investment opportunity.

However, depending on the type of business you intend to conduct in Dubai, they may require you to apply for VAT registration.

VAT, or value-added services in Dubai, is a type of tax levied on goods and services. It is a type of indirect tax that has been successfully implemented in over 150 countries around the world. The VAT collection process, which was introduced in the UAE in 2018, assists business owners in collecting taxes from customers on behalf of the Federal Tax Authority (FTA).

The FTA is the government department in the UAE that is responsible for implementing VAT and other tax-related procedures. As a foreign investor, you should be aware of several details concerning VAT registration services in the UAE, such as eligibility, types of VAT services, refund status, and so on.

2. VAT registration services for businesses in Dubai

If you sell taxable goods and services in your business, you must register for VAT. Similarly, VAT registration services in Dubai are available to established businesses in both Mainland and in the free zone. All you have to do is check for eligibility requirements and begin the registration process.

Businesses must have a TRN number to comply with law. A Tax Registration Number is a 15-digit number assigned to a business owner or vendor if they are VAT registered. The Federal Tax Authority is in charge of issuing it and it is valid for trade throughout the UAE.

Apart from serving as proof of VAT compliance, this number provides numerous advantages to businesses:

  • TRN is also proof of a company’s operational status in the UAE.
  • It aids in the filing of returns and the receipt of VAT reimbursements.
  • TRN numbers enable businesses to claim input VAT-related expenses from the UAE government.

3. VAT registration services available in Dubai

In Dubai, there are various types of VAT registration services available depending on your company’s revenue and taxable income.

3.1. Voluntary VAT registration 

The voluntary VAT is available to businesses with annual revenue of AED 187,500-375,000 in the previous 12 months. If your company’s annual revenue falls into this category, you can apply for a voluntary UAE tax registration and a TRN number.

The UAE government will not find you if you do not obtain it. Voluntary VAT registration services in the UAE are also available if you anticipate a business turnover of more than AED 187,500 in the next 30 days of your application.

3.2. Compulsory VAT registration

They require UAE VAT registration for businesses with an annual turnover of more than AED 375,000. This means you will need to obtain a Tax Registration Number for your business to run smoothly in Dubai and the other emirates.

Hence, you will be able to collect VAT from your customers for the goods and services you sell once you have received your TRN number.

3.3. What is the VAT registration deadline in Dubai?

Since the UAE government implemented VAT registration services in Dubai, applications from businesses of all sizes, industries, and budgets have been invited. The Federal Tax Authority has created an online portal for businesses to easily register for VAT and obtain their TRN number.

However, before proceeding with the application process, you must have completed all of the prerequisites. You can apply for VAT registration in the UAE at any time of year, depending on the FTA’s acceptance of category-specific applications.

3.4. VAT registration services for foreign investors in Dubai

Foreign business owners are not residents of Dubai but conduct business there. If you sell goods or services in Dubai without a sponsor who accounts for the VAT due, you must register for VAT. Upon successful registration, you will receive a Tax Registration Number, just like any other business.

We invite you to keep in mind the outstanding tax consultancy services offered by us, Connect Group. Hence, we will provide you with the necessary assistance in the entire process.

4. How to apply for the UAE VAT registration?

Businesses must apply for VAT as a government requirement. While the government announces deadlines based on business turnover or VAT type regularly. You should also be familiar with the application process.

This will assist you in understanding the details that they require to complete your application and prepare the necessary documents ahead of time. To avoid delays or hindrances, make sure you follow the procedure exactly.

Firstly, you have to create an account on the FTA eService Portal. Then, you will find an online VAT registration form after logging into your account. So, they will require the following information in the form:

  • Details about your company.
  • Personal information
  • Your company’s contact information.
  • Banking information
  • Information on VAT registration. (This is covered by the FTA.)
  • VAT registration services declaration in the UAE
  • After you’ve completed all of the fields, click on review and submit.

On the other hand, they require the following documents for VAT registration in the UAE:

  • Copy of the business owner’s passport (s).
  • A copy of your company’s trade license.
  • Identification information from the UAE.
  • Account information and IBAN for the company.
  • Keep track of your company’s revenue over the last year.
  • Association Memorandum (MOA).
  • Code of Registration for Customs Authorities.

5. What you should know about VAT registration in the UAE

The UAE implemented VAT (value-added tax) in January 2018, with a standard rate of 5%. Although VAT will be beneficial to the UAE (generating revenue to improve public services and infrastructure), many business owners are opposed to the concept.

Therefore, if you make a mistake, you could overpay, reduce cash flow and jeopardize innovation, or underpay, exposing yourself to fines. However, the VAT landscape is not as complicated as it appears. Here are four things you should know to ensure your company is well-prepared.

5.1. Not every business has to pay VAT

Only if your company’s taxable supplies and imports exceed AED 350,000 per year do you need to register for VAT in the UAE. They calculate this on the basis that you either exceeded the limit in the previous 12-months or expect to exceed it in the next 30-days.

If your taxable supplies and imports fall below this threshold but exceed AED 187,500, you have the option but not the obligation to register for VAT. Knowing when to register (or deciding when to register voluntarily) is difficult. If you fail to register when you should, for example, you may face penalties and fines.

Voluntary registration can also be beneficial, opening the door to tax refunds or offsetting expenses, but it can also be an unnecessary hassle and cost. Seek the assistance of VAT experts to help you understand the complexities of UAE tax registration. For example, what if your company earns less than the threshold for the majority of the year but exceeds it in the last month? What if you predict you will go over the limit but do not?

VAT also imposes an administrative burden, as you must complete VAT returns correctly and on time. Hence, VAT specialists ensure that you are ticking all of the right boxes to maximize your working capital while also protecting yourself from risk.

5.2. VAT does not apply to all goods and services

Some goods and services are exempt or zero-rated from VAT, which means you will not have to pay any VAT on them; and you will not be able to charge customers or claim VAT back on goods and services you have already paid for. Some educational services, investment-grade precious metals, exports outside the GCC, and healthcare services are examples of zero-rated goods and services.

So, VAT-free sectors include bare land, residential real estate, and local passenger transportation. The complication is that while exempt goods and services are completely exempt from VAT, zero-rated goods and services are still considered VAT taxable at 0%. This means that you must continue to record all zero-rated supplies in your VAT records as usual. Zero-rated supplies are also counted toward your AED 350,000 total.

Even more complicated, you can apply for VAT exemption if you only make zero-rated supplies, but if you make any other supplies, you must register for and record VAT.

Because of these nuances, most business owners should consult with VAT experts who can advise them on where their liabilities lie. This is especially true if your company sells or purchases goods that do not fall neatly into the standard VAT category. Thus, if you do not get this information right, you could end up overpaying and jeopardizing your cash flow, or underpaying and risking fines.

6. VAT registration in the UAE: Frequently asked questions

6.1. Is anyone who does not have a place of residence in the UAE required to register for VAT?

If supplies of goods/services are made, the above-mentioned person must register for VAT, and they do not require any other person to pay the due tax in the UAE on these supplies.

6.2. What is the deadline for notifying the authority about VAT registration?

In the case of Mandatory Registration, the individual must apply for tax registration within 30 days of being required to do so.

6.3. Is it possible for a person to obtain more than one Tax Registration Number (TRN)?

Multiple TRNs are not permitted for business conducted in the UAE.

6.4. Is it possible for companies operating in the UAE to obtain tax registration exemptions?

Yes, it is possible for taxable individuals whose supplies are zero-rated. You should request the appropriate authority.

6.5. Is the value of capital assets going to be taken into account when calculating the registration threshold?

If a person owns the capital asset, the supply of the asset is not subject to any registration threshold.

6.6. Is it possible for an application to register as a tax group to be denied?

Yes. The following scenarios could be grounds for refusal:

  1. The respective persons do not meet the authority’s definition of a related party.
  2. There are compelling reasons to believe that this registration may result in tax evasion or a significant decrease in the authority’s tax revenues or an increase in the authority’s administrative burden.
  3. Any of the applicants is not a legal person.
  4. One of the applicants is a government entity, and (5) one of the applicants is a charity.

6.7. Is the sale of a business asset or the business itself to a third party a taxable supply?

The sale of the asset by a VAT registrant would be considered a taxable supply and thus subject to standard rate VAT unless the asset is exempt. However, if the assets or business are sold to a taxable person as a going concern, they are not VAT eligible.

7. How can Connect Group help you?

Now you are aware of the tax policies in the UAE. However, if you are a foreign investor, these can be difficult to understand. This is why you need a business consultancy that offers tax & VAT services in the UAE.

Connect Group understands the significance of completing the legalities and documentation that they require for your business. That is why we are here to provide you with expert advice at every stage of your Dubai business. You can speak with one of our seasoned business consultants, who will expertly guide you through this journey

Would you appreciate our expert assistance with the UAE tax registration? We are your best business partners. Contact us today. You can reach us by phone at +971 43 316 688. Send us all of your inquiries now at contact@connectgroup.co.

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