VAT Registration Services in Abu Dhabi

Value Added Tax, or VAT, was introduced in the UAE in 2018 as a means of economic diversification and accelerating economic growth. Since 2018, the United Arab Emirates has charged a 5% VAT on most products and services sold. A business in Abu Dhabi would also want to be VAT registered in order to be compliant with the Federal Tax Authority. Its registration will ensure that a business is able to charge Value Added Tax on its taxable supplies, reclaim VAT payable on business expenses, and thus avoid any penalties for failing to make those reclaims.

The threshold for mandatory VAT registration means registering a business is necessary when turnover exceeds AED 375,000. Voluntary registration is offered for businesses where annual turnover is below that threshold.

Who Needs VAT Registration Services in Abu Dhabi?

Eligibility Criteria for VAT Registration

Businesses in the UAE must register for VAT if they meet any of the following conditions:

• Taxable Supplies Threshold: The business's annual turnover exceeds AED 375,000.
• Taxable Imports Threshold: The business's annual imports exceed AED 375,000.
• Expected Taxable Supplies/Imports: The business expects to exceed AED 375,000 in taxable supplies or imports within the next 30 days.

Voluntary Registration Conditions

Businesses can voluntarily register for VAT if they meet the following conditions:

• Lower Annual Turnover: The business’s annual turnover is below AED 375,000 but exceeds AED 187,500.
• Expected Turnover: The business expects to exceed AED 187,500 in the next 30 days.
• Zero-Rated Supplies: The business engages in zero-rated supplies, such as healthcare or education services.

Exemptions and Special Cases

Some businesses and sectors are exempt from VAT or have special conditions:

Exemptions:

• Certain financial services.
• Residential rental income.
• Local passenger transport services.

Special Cases:

• Government entities.
• Charitable institutions.
• Non-profit organisations.
• Small businesses with an annual turnover below AED 187,500.
• Foreign businesses with a presence in the UAE.

Consequences of Non-Registration

Failing to register for VAT when required can lead to severe consequences, including:

• Penalties: Ranging from AED 10,000 to AED 50,000.
• Fines: 5% of any unpaid VAT.
• Business Closure: Non-compliance can result in the suspension or closure of the business.

VAT Registration Process

To register for VAT, businesses must follow these steps:

• Register on the FTA Portal: Businesses must create an account and complete the online VAT registration form.
• Provide Required Documents: Submit documents such as trade licenses, identification, and financial records.
• Obtain a VAT Registration Certificate: Once approved, the business will receive its VAT registration certificate.

Step-by-Step VAT Registration Process in Abu Dhabi

Step 1: Collect Required Documents

• Trade license copy
• Bank account details
• Memorandum and Articles of Association
• Passport copy of the business owner or manager
• Proof of business address
• Tax compliance certificate (if applicable)

Step 2: Complete and Submit Online Application

• Log in to the FTA portal
• If new, create an account; if you already have an account, log in
• Select "VAT Registration"
• Fill out the application form
• Upload the necessary documents
• Submit the form for processing

Step 3: Review and Approval Procedure

• The FTA reviews the submitted application
• Verifies the provided documents and information
• You will receive notification of the application’s approval or rejection

Step 4: VAT Registration Certificate and TRN Issuance

• Receive your VAT registration certificate
• Obtain your Tax Registration Number (TRN)
• Update your business records and systems with your TRN to stay compliant with VAT regulations
  
  

VAT Registration Deadline in Abu Dhabi

In Abu Dhabi, businesses are required to register for Value Added Tax (VAT) if their taxable supplies or imports exceed AED 375,000 within the previous 12 months or are expected to exceed this threshold in the next 30 days. Once this threshold is exceeded, businesses must complete their VAT registration within 30 days. Failure to register within this timeframe can lead to significant penalties, including fines of up to AED 20,000 for non-compliance.

Benefits of VAT Registration Services in Abu Dhabi

• Compliance with UAE Tax Laws: VAT registration ensures businesses comply with UAE tax laws, avoiding legal repercussions and penalties.
• Ability to Reclaim VAT on Business Purchases: Registered businesses can reclaim VAT on eligible purchases, reducing operational costs.
• Enhanced Business Credibility: VAT registration demonstrates a business's commitment to transparency and compliance, enhancing credibility.
• Avoidance of Penalties and Fines:  Registration avoids penalties (AED 10,000 to AED 50,000) and fines (5% of unpaid VAT) for non-compliance.
• Improved Financial Management: VAT registration promotes accurate financial record-keeping and reporting.

VAT Post-Registration Responsibilities in Abu Dhabi

VAT Invoicing

After registering for VAT, businesses must issue VAT-compliant invoices to their customers. These invoices should include specific details such as the VAT registration number, the total amount charged, the applicable VAT rate (currently 5%), and a breakdown of the taxable supply. Proper invoicing is crucial for maintaining compliance and ensuring that businesses can claim input tax credits.

VAT Returns

Businesses are required to file VAT returns regularly as per the guidelines set by the Federal Tax Authority (FTA). Typically, VAT returns must be submitted on a quarterly basis, with deadlines falling on the 28th of the month following the end of each quarter. For example, the return for Q1 (January to March) would be due by April 28. Accurate and timely filing is essential to avoid penalties and maintain good standing with tax authorities.

Record Keeping

Maintaining accurate financial records is vital for audits in Abu Dhabi. Businesses must keep detailed records of all transactions related to taxable supplies and imports, including sales invoices, purchase invoices, and any other relevant documentation. These records should be retained for at least five years from the end of the tax period to which they relate, as they may be subject to review by the FTA during an audit.

VAT Registration Fees and Processing Time in Abu Dhabi

Fees

VAT registration in Abu Dhabi is free of charge. Businesses do not incur fees when applying for their Tax Registration Number (TRN) through the FTA’s online portal.

Processing Time

The estimated time for application submission and processing by the FTA is around 20 business days. Once approved, businesses will receive their TRN via email, allowing them to start charging VAT on taxable supplies and fulfilling their reporting obligations.

Top VAT Registration Experts in Abu Dhabi

If you need help with VAT registration and compliance in Abu Dhabi, there are several great firms to consider. Here are some of the top experts in the area:

• Reyson Badger

Reyson Badger stands out for its thorough VAT services. They guide businesses through the VAT registration process and help ensure compliance with UAE tax laws. Their team makes it easier for clients to understand VAT rules, making them a solid partner for handling VAT matters.

• Shuraa Tax

Shuraa Tax is known as a consultant for VAT in Abu Dhabi. They offer services like VAT return filing, audits, and consultations. With their solid understanding of VAT laws, they help businesses meet compliance requirements. Shuraa Tax supports companies as they adapt to changing regulations.

• Deloitte & Touche

Deloitte's VAT team is well-versed in VAT rules. They provide personalized solutions to help businesses stay compliant. By using the latest technology, they make sure the compliance process is smooth and accurate.

• KPMG

KPMG is another strong choice for VAT help in Abu Dhabi. They offer support throughout the VAT compliance process. Their team is proactive and works hard to spot potential issues, helping clients stay compliant and avoid penalties.

• Ernst & Young (EY)

EY takes a creative approach to VAT compliance. They help clients turn their legal duties into business advantages. With innovative practices and tech, EY helps businesses optimize their VAT strategies while following the rules.

• BDO UAE

BDO UAE is known for its personalized VAT services. Their experts focus on understanding each client's unique needs and provide tailored solutions. This strong emphasis on client relationships makes them a popular choice for VAT advisory.

• Grant Thornton UAE

Grant Thornton combines expertise and technology to simplify VAT compliance. They offer traditional consulting alongside modern tech solutions, ensuring businesses can easily navigate VAT regulations.

• AMA Audit Tax Advisory

AMA Audit Tax Advisory offers personal service and technical know-how in VAT consulting. Their team works closely with clients for smooth compliance and smart VAT planning.

• PKF UAE

PKF UAE provides a wide range of VAT services that are suitable for all business sizes. They focus on helping businesses comply with VAT rules while also looking for ways to reduce tax burdens.

Common Challenges in VAT Registration in Abu Dhabi

• Errors in Documentation: Inaccurate or incomplete documentation can lead to registration delays or rejection
• Delays in the Approval Process: FTA review and approval may take longer than expected, causing business disruptions.
• Lack of Knowledge of VAT Regulations: Insufficient understanding of VAT laws and regulations can result in non-compliance.
• Compliance with VAT Filing and Record-Keeping: Maintaining accurate VAT records and filing returns on time can be challenging.

Why Choose Professional VAT Registration Services in Abu Dhabi?

• Expertise in VAT Laws and FTA Regulations: Professional registration services for VAT offer expertise in UAE VAT laws and FTA regulations to ensure accurate and compliant registration.
• Efficiency in the Registration Process: Experts smoothly navigate the complex registration process, saving time and avoiding the delays that usually come with it.
• Avoid Mistakes and Delays through Professional Expertise: Professional guidance avoids mistakes in documentation, and submission will be done on time to prevent rejection and delay.
• Further Support in VAT Filings and Compliance: Professional service companies offer all-time support in the form of VAT return filing, recordkeeping, and compliance, ensuring continued compliance.

One of the critical requirements to ensure compliance of your business with UAE tax regulations is registration for VAT. To make it easier, collect all documents, complete an application perfectly correctly, and ensure that all business records are up-to-date. To facilitate professional help in this area, Reyson Badger shall guide each step required and ensure that the process will be clear, smooth, and efficient in VAT compliance.

Contact Reyson Badger today to get free tax registration and manage your business according to the UAE's tax policies.