VAT Registration Requirements in Dubai

Starting from January 1, 2018, the UAE introduced a 5% Value-added Tax (VAT) on goods and services, with exceptions for basics like food, healthcare, and education. Governed by Federal Decree-Law No. 8/2017, along with related decisions, this VAT applies similarly to systems in Europe and other countries. If your annual turnover exceeds AED 375,000, registering for VAT by December 31, 2017, is mandatory. Once registered, companies and individuals need to submit regular returns to the Federal Tax Authority (FTA) and pay the applicable tax. This blog will cover different VAT services, VAT registration requirements in Dubai, the documents you'll need, the step-by-step process for VAT registration, Tax Group registration, and VAT deregistration.

Types of VAT Registration Services in Dubai

There are two types of VAT Registration Services available in this emirate, each depending on your corporation's profit and taxable income.

Voluntary VAT Registration

For corporations with annual business profits ranging from AED 187,500 to 375,000, voluntary VAT registration is applicable. Opting for this service provides you with a Tax Registration Number (TRN). Importantly, the UAE government won't impose fines if you choose not to register voluntarily. This option is also relevant if you anticipate that your company's turnover in the next thirty days will exceed AED 187,500.

Mandatory VAT Registration

Companies with an annual turnover exceeding AED 375,000 are obligated to undergo mandatory VAT registration. This ensures obtaining a TRN, necessary for smooth business operations in this emirate and others. With your tax registration number secured, you can apply VAT to the goods and services you sell, thereby complying with legal requirements.

VAT Registration Documents in Dubai

When it comes to VAT registration in Dubai, specific documents are required to facilitate the process:

• Identification documents for the authorized signatory, such as a passport copy and Emirates ID.
• Copy of the company's trade license.
• Official documents authorizing the entity/individual to conduct activities within the UAE, including the certificate of incorporation, articles of association, and power of attorney.
• Description of business activities.
• Turnover details for the last 12 months in AED.
• Supporting documents for 12-month sales.
• Expected turnover in the next 30 days.
• Estimated value of imports for 1 year from each GCC country.
• The estimated value of exports for 1 year to each GCC country.
• Indication of whether you expect to deal with GCC suppliers or customers.
• Supporting documents for customs registration in each emirate if applicable.
• Bank account details. These documents collectively contribute to a smooth VAT registration process in Dubai.

Steps to Apply for VAT Registration in Dubai

Securing VAT services in Dubai is a government obligation, and the associated deadlines are communicated by the government based on company turnover and VAT types. Familiarizing yourself with the application procedure is crucial to ensure a smooth process and avoid delays.

• Create an account on the e-service Portal and register on it to initiate the VAT application process.
• Upon logging in, you'll find an online VAT registration form.
• Provide essential details, including company information, personal information, business contact details, and banking information.
• Enter specifics about your VAT registration. Declare any business relationships pertinent to the application.
• Once all information is entered, review the details. Click "Submit" to finalize your VAT services application.

Registering a Tax Group

When establishing a tax group in the UAE, only the representative company has the authority to apply for tax group registration. The representative company must either possess a Tax Registration Number (TRN) or submit a VAT registration application while initiating the tax group formation.

For each potential member to join the Tax Group, they must meet the following criteria:

• Qualify as a legal entity under UAE law.
• Be a resident in the UAE, ensuring compliance with residency regulations.
• Confirm non-membership in any other existing Tax Group.

By adhering to these criteria, the formation of a tax group ensures a structured and compliant collaboration among eligible companies in the UAE.

Deregistering for VAT

If necessary, deregistering for VAT is an option to consider. It's important to note that companies that have voluntarily registered for VAT must remain registered for a minimum of 12 months before applying for deregistration.

Deregistration is advisable under the following circumstances:

• If your company ceases making taxable supplies, deregistering for VAT is recommended.
• Deregistration is suitable when the value of your taxable supplies drops below the voluntary threshold.
• If you do not foresee your taxable supplies surpassing the voluntary threshold within the next 30 days, deregistration is a prudent step.

VAT Services in Dubai

Registering for VAT in the UAE won’t be complex with the support of VAT consultants in Dubai. Avoiding complications and potential fines is crucial in meeting VAT responsibilities. Reyson Badger, a leading accounting and auditing firm in the UAE, offers professional VAT registration services. With our experienced team and strong presence in Dubai, Reyson Badger simplifies the process, ensuring compliance with UAE tax laws. For more information, reach out to Reyson Badger.