VAT Registration UAE

Value-added tax, or VAT, is a type of indirect tax that is used in 160 countries throughout the world. VAT is a taxing system that is levied on the consumption of a variety of commodities, products, or services. It is a “Consumption tax” that has nothing to do with the taxpayer’s income. This taxation system is commonly used in the European Union. VAT was implemented in the UAE and the GCC countries in the beginning of 2018. Obtaining VAT registration will be the initial phase towards transiting the businesses to the VAT era.

The VAT rate in the UAE and the Gulf Cooperation Council nations is 5%. As the name implies, the value-added tax adds or increases the value of a product or commodity at various stages of the supply chain. And this value addition occurs throughout the manufacturing process, as well as during distribution and sales. VAT registration service is required in Dubai, UAE for all enterprises, regardless of their domain or size. If you are an entrepreneur looking to grow your business into the UAE or a business owner in the UAE, you should be familiar with VAT registration service in the UAE. 

Businesses can apply for VAT registration in UAE if their annual revenue surpasses the statutory registration barrier of AED 375,000 and the voluntary registration threshold of AED 187,500. As a result, it’s critical for companies to understand which types of supplies are taken into account when calculating yearly supplies turnover and how to calculate VAT turnover for UAE registration.

Damaar Business Setup Consultants is a renowned VAT consultant in Dubai, UAE, offering top-notch VAT registration services throughout the Emirates. We’ll go over the many facets of VAT in relation to registration, VAT Certificates, VAT Groups, and so on in great detail.


Eligibility For VAT Registration In UAE

Although the VAT is still a relatively new tax, the government has made significant progress in explaining and assisting people who must register for it in the Emirate. For new businesses, VAT registration is voluntary; however, it may become essential under certain circumstances. The entities necessary to apply for VAT registration service in Dubai are listed below:

  • Companies who sell or import products and services worth more than 375,000 AED per year must register for this tax.
  • VAT registration is necessary for foreign enterprises providing VAT-taxable products and services in Dubai.

VAT-registered enterprises in Dubai will charge and collect the tax from the ultimate consumer, then pay it to the government. Businesses must submit VAT returns for this reason in order to be able to recoup the VAT they have paid. It’s good to know that overseas enterprises who have registered for VAT in Dubai might get refunds.

Documents Required For VAT Registration In UAE

A tax identification number is one of the most crucial requirements to meet when applying for a VAT number in Dubai. This is obtained in conjunction with the Certificate of Incorporation from the Dubai Trade Register. A corporation shall be issued a tax certificate based on the tax identification number it possesses.

You must have the following documents available before registering for VAT registration in Dubai and the UAE:

  • The company’s Memorandum of Association or MOA
  • Emirates IDs of the owner and partner (copy)
  • The company’s trade license (copy)
  • Passports of the owner and his or her partner (copy)
  • The company’s contact information
  • Business category and information on the activities carried out
  • Details about your bank account
  • The most recent year’s income statement

Although VAT registration service can be conducted online through the Dubai Government’s online portal, the procedure might be tough for business owners due to the vast list of documents that must be filed and the requirement of obtaining an online account. This technique is something that our experts can assist you with.

Procedure For VAT Registration Service In UAE

If your business has an annual revenue of more than AED 375,000 in the UAE, you are required to register for VAT. It easier for firms to register for VAT because the Federal Tax Authority (FTA) has created an online VAT registration gateway. While it is very important for all the businesses to understand their duties regarding VAT registration, they must also understand the procedure on how to apply for aforementioned VAT registration and the degree of information required to complete the procedure for online registration.

This is because, before applying for or beginning the online VAT registration process, having a good understanding of the types of information needed and the stages to complete the online VAT registration will allow you to plan ahead of time. As a result, the registration process can be finished quickly and without additional delays caused by erroneous information, which could result in the registration application being rejected.

  • Account creation for e-Services
  • VAT Registration Form: Login to your e-Service Account. The online VAT registration form has eight sections, in which the applicant’s information must be provided to complete the VAT registration.
  • Information about the applicant
  • Information about how to contact the applicant
  • Bank account information
  • Business related relationships 
  • Information concerning the VAT Registration
  • Declaration
  • Examine and submit

Benefits Of VAT Registration In UAE

Here are some of the most obvious advantages of registering your business for VAT.

  • VAT does not have penalties if you register for it.
  • Vat reimbursements can be requested in writing by businesses.
  • VAT improves commercial opportunities.
  • The VAT raises the company’s profile.
  • VAT management is simple when compared to other taxing systems such as indirect tax.
  • Prevents tax avoidance from occurring.
  • VAT allows for more revenue creation.
  • VAT can be imposed on any type of business because it is a neutral tax.

Drawbacks Of VAT Registration In UAE

  • Because VAT uses a full billing mechanism, it can be expensive to implement.
  • VAT is regressive since it affects the poor’s purchasing power.
  • The cost of compliance is high because a corporate entity requires to retain records of all financial transactions.
  • VAT has a multi-stage tax structure and hence is difficult to comprehend.