The United Arab Emirates (UAE) VAT is a tax on consumption imposed on most items and services sold within the country. Suppose your company is located within the UAE, or you plan to open a new company in the UAE, and you are a resident of the UAE. In that case, you might be required to sign up for VAT if the value of your tax-exempt imports and supplies exceeds a specific threshold.
To register to pay VAT registration in the UAE to be eligible for VAT registration in the UAE, you’ll have to comply with these steps:
- Check if your business is eligible to be registered for VAT. In the UAE, companies with an annual turnover greater than AED 375,000 are required to sign up for VAT.
- Get the documents you need. To register for VAT, you’ll need all the documents listed below:
- Trade license
- Emirates ID or the passport of the business owner(s)
- Application for VAT registration form
- Complete an online application for the VAT Registration application. You can complete your VAT Registration online via FTA’s (FTA) e-Services portal or in an FTA customer service center.
- Wait for approval. After you’ve completed your VAT Registration form, The FTA will examine your application and decide whether you’re qualified to apply for VAT Registration. When your request is accepted and approved, you will be issued an official tax registration certification.
- 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 file VAT returns with the FTA regularly to record the amount of VAT you’ve collected, and any VAT paid on purchases.
It’s crucial to remember that it is possible to be a challenge. It is recommended to seek the advice of an expert tax advisor to ensure you adhere to UAE VAT laws.
The VAT de-registration process in UAE
The United Arab Emirates (UAE) companies certified for VAT (VAT) can de-register for VAT if they satisfy specific requirements. To de-register VAT, a company must notify the Federal Tax Authority (FTA) and file a de-registration application using the FTA’s electronic services portal.
To be qualified to be eligible for VAT de-registration, A company must satisfy the following requirements:
- The company should only have tax-deductible supplies or imports within the last 12 months.
- The company should refrain from being able to claim any tax-exempt imports or supplies within 30 days.
- The company should not be in the middle of taxes or penalties.
If a business complies with these requirements, it can apply for de-registration through the de-registration form available through the FTA’s e-services portal 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, the company won’t be obliged to invoice VAT for its goods or pay tax on imports and won’t be required to submit VAT returns. However, the company could 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 the process through which businesses are required to report the VAT amount they paid on sales and the VAT amount they spent on purchases. VAT returns are usually filed regularly, for instance, each month or quarter, based on the regulations 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 regularly submit VAT returns to the FTA. VAT returns are submitted electronically via the FTA’s e-Services portal.
To prepare VAT tax returns in the UAE, companies will have to:
- Collect all needed documentation, such as invoices, receipts, and other documents relating to 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 navigate to the section for filing VAT returns.
- Input the necessary information, including your total VAT charged on sales and all VAT owed on purchases.
- Send your VAT tax return.
It is important to remember that businesses must submit their VAT returns within the deadline specified in the FTA. If a company fails to offer its VAT returns on the deadline, it could be subject to penalties or fines.