Whether you have a small, medium or large business in the UAE, you must register for VAT as per the UAE VAT law. Registering your business for VAT means that it is known and accepted by the UAE government. Your need to register for VAT depends on how much revenue your business generates.
Dubai Business Services Group is one of the top companies in the UAE that provides reliable VAT registration assistance in Dubai. They also help with VAT cancellation, VAT accounting, VAT return filing and more.
What Is VAT?
VAT or Value Added Tax is a tax added to the price of goods and services at every stage of sale. The final cost is paid by the end customer. Businesses must collect and remit this tax to the government.
In the UAE, VAT applies to all tax-registered businesses, both in the mainland and in free zones.
Taxable supplies mean goods or services supplied by a business in the UAE that are taxed at 5% or 0%.
Types of VAT Registration
There are two types of VAT registration in the UAE. The type of VAT registration for your business depends on your past and expected annual revenue.
Mandatory VAT Registration
If your business earns more than AED 375,000 per year, you must register for VAT. This is called mandatory VAT registration. It allows you to legally add VAT to your sales. DBS Group helps you follow all the steps required for mandatory VAT registration.
Voluntary VAT Registration
If your annual revenue is between AED 187,500 and AED 375,000, you can choose to register for VAT. This is called voluntary VAT registration. It gives your business a TRN and allows you to reclaim the VAT you have paid on business expenses.
DBS Group's VAT team examines your business and helps you decide whether voluntary VAT registration is right for you.
Documents Required for VAT Registration in UAE
To obtain VAT registration and TRN in Dubai, FTA requires a few documents. These include:
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Trade license
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Company papers (such as articles of association)
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Bank account information
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Copy of ID or passport
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Certificate of incorporation
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Sales bills for the last 12 months to show income
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Customs papers if required
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Full details of your business operations
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If you will be dealing with GCC customers or suppliers
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Power of attorney showing who can sign the papers
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An estimate of what goods you will import from the GCC in 1 year
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An estimate of what goods you will export to the GCC in 1 year
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Expected income in the next 30 days
DBS Group checks and collects all of these papers before starting your VAT registration.
VAT Registration Procedures
There are two types of VAT registration in the UAE:
1. Mandatory Registration
A business must register for VAT:
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If its total taxable sales and imports in the last 12 months exceed AED 375,000
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Or if it expects this amount to exceed AED 375,000 in the next 30 days
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This rule does not apply to companies outside the UAE.
2. Voluntary Registration
A business can choose to register for VAT:
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If it does not meet the rules for mandatory registration
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But expects its total taxable sales, imports or expenses in the last 12 months to exceed AED 187,500
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Or if it expects this amount to exceed AED 187,500 in the next 30 days
Easy UAE VAT Registration with AEDBS Business Services
AEDBS Business Services helps you register for VAT in the UAE in a simple and easy way. Our team knows all the steps and rules and will help you from start to finish. We make sure your business complies with the rules. With DBS Group, you don’t have to worry. You can focus on your work, and we will take care of all the VAT steps so that your business runs smoothly.
FAQs: People Also Ask
When Should You Register for VAT in the UAE?
If your business in the UAE earns more than AED 375,000 in a year, you must register for VAT. You must do this within 30 days of crossing that amount. If not, you may be fined. If your earnings are less than AED 375,000, you can still register if it is at least AED 185,000.
When Should a Company File a VAT Return in the UAE?
Once your tax papers state your tax period and return filing time (monthly or every 3 months), you must file your VAT return by the 28th of the month following the end of the tax period.
Do Non-Residents Need to Register for VAT in the UAE?
Yes, non-residents must register for VAT if they are selling goods or services in the UAE and do not have anyone in the UAE to handle VAT for them. They can seek the help of a tax professional to register for VAT.
Are Free Zone Companies Charged VAT in the UAE?
Yes, free zone companies are also required to follow VAT rules. The rules depend on the type of free zone:
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Free Zone: In many free zones, VAT is not charged within the zone.
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Designated Zone: These are special zones with different VAT rules. VAT is not charged on the movement of goods between these zones.
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In other zones (not in special zones), 5% VAT is added to most goods and services.
What Is The Deadline for Registering for VAT?
A business must register for VAT within 30 days of exceeding the set limit or if they think they will exceed it in the next 30 days.