Determining the registration threshold for VAT in the United Arab Emirates (UAE) is not a really difficult task by all means. Whenever any business is done in the UAE, there are several questions that come up whether entities come with tax registration number (TRN) or not. If you do not possess the TRN, it becomes an issue since many suppliers/customers will not be trading with you likewise. Whenever business is done by individual operators, there remains confusion over whether registration of VAT in the United Arab Emirates (UAE) is valid for individuals or whether it is for businesses.

There are several doubts that also emerge in such scenarios. A business should apply for VAT registration in case the taxable turnover (services/sales) surpasses the registration threshold for VAT. The registration is applicable for individuals and businesses alike in case the threshold is adhered to.

Key things to remember

Taxable supplies on the basis of the VAT regulations in the UAE should be carefully understood since not all supplies/services will be taxed. Those supplies which have the supply place in the country and are not under the exempt supplies category, will be taxable for VAT. Those supplies having place of supply outside the country will not find a place in the VAT tally as well. Those who are UAE residents or Implementing State and with taxable turnover in the earlier period of 12 months or coming 30 days, exceeds the registration threshold, should be VAT registered in the United Arab Emirates (UAE).

The registration should be done with the filing of a tax registration application to the FTA (Federal Tax Authority) within a period of 30 days from being required to undertake registration.

Thresholds that you should note

The compulsory registration threshold for businesses or individuals is AED 375,000 and the voluntary threshold for VAT registration is AED 187,500. The limits will apply only for residents in UAE and not for persons outside the country. Non-residents or persons outside the implementing state will have to apply for VAT registration in the United Arab Emirates (UAE) in case they have any supplies which are taxable in the UAE and for which no other individual holds responsibility to account for VAT here.

A natural/legal person has to get registered for VAT in UAE if the taxable supplies surpass the limit mentioned earlier. Registration within the stipulated time period will help in steering clear of penalties/fines which are also applicable on late filing of the VAT returns. Taxable supplies considered include standard rated, reverse charge and zero rated supplies along with imports for goods.

Documents required for VAT registration

  • Copy of trade license
  • Copy of Emirates ID (authorized signatory and manager)
  • Certificate of Incorporation
  • Article of Association/partnership agreement/similar proof of information regarding company ownership
  • Contact details of organization including building number, name, area, street, city, PO, Emirate, Box No., phone number and country code and so on
  • Turnover over last year, expected turnover in coming 30 days, VAT-applicable expenses for last year, expected expenditure in coming 30 days
  • Bank account information in UAE including name, branch, name of bank, IBAN number, BIC and so on
  • Registration number for customs and supporting documents
  • Proof of authorization including board resolution, power of attorney and memorandum of association
  • Financial proof including purchase/sale invoices which are duly stamped and signed

If you are seeking help with VAT registration in the UAE along with other services like company incorporation, accounting, auditing and taxation, you should reach out to GCC Filings. The company will help you navigate all these aspects with aplomb.