VAT Registration in UAE
Business with sales of AED 375,000 or more in the last 12 months shall submit their VAT registration applications within 30 days. Furthermore, a business may choose to register for VAT voluntarily where the total value of its taxable supplies and imports (or taxable expenses) is more than AED 187,500.
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VAT registration is a 100% online process. VAT Registration makes a business eligible to collect VAT. The Federal Tax Authority of United Arab Emirates is the relevant authority overseeing the VAT Implementation and compliance in UAE.
Frequently asked questions.
Amount of taxable turnover is the criteria to determine whether to register for VAT or not:
- COMPLUSORY REGISTRATION
If taxable turnover of your business is more than AED 375,000 in the previous 12 months or you expect (based on documentary evidence) that your turnover will be more than AED 375,000 in next 30 days, then you must make a VAT registration application within 30 Days from the date when the turnover exceeded AED 375,000.
- OPTIONAL REGISTRATION
If you are not mandatorily required to register as mentioned above, you will only become eligible to make a VAT Registration application if either one of your taxable turnover or taxable expenses were more than AED 187,500 in the last 12 Months; or You expect (based on documentary evidence) that your taxable turnover or expenses will be more than AED 187,500 in the next 30 days.
- NO REGISTRATION
If your taxable turnover in the previous 12 months is less than AED 187,500 then you are neither mandatorily required to make an application for VAT registration nor you are eligible to make an application. Any application made will be rejected by the Federal Tax Authority.
Any foreign business, which does not have presence in UAE, shall make an application for VAT Registration if it makes supplies of Goods or Services to an end consumer or an unregistered business (who cannot account for due tax on behalf of foreign business since its unregistered). This is to be noted that there is no minimum amount of sales required to be completed to become eligible of making a VAT Registration application. The Non Resident business shall immediately apply for VAT Registration on making any amount of such sales.
ABC Co. Pvt. Ltd. of India want to make sales in UAE using an e-commerce platform in the UAE. It is pretty evident that since the sales are planned to be made to end consumers, there is no one in the UAE who will account for VAT in the UAE on behalf of Non Resident Business. Hence, It becomes mandatory for Non-Resident business to make an application within 30 days of making its first sales in UAE, irrespective of amount of sales.
Two or more persons conducting Businesses may apply for Tax Registration as a Tax Group if all of the following conditions are met:
1. Each shall have a Place of Residence in the UAE.
2. The relevant persons shall be Related Parties.
3. One or more persons conducting business in a partnership shall control the others.
The VAT Law has provided an option for persons conducting business to apply for registration as a tax group. It is relevant to note that only legal persons are entitled to take registration as tax group. Natural person cannot become member of a Tax group. To satisfy the 2nd Condition of Related Parties please get in touch with us and we’ll you determine.
The Federal Tax Authority of UAE can take up to 20 business days to give their first response on the VAT registration application. The turnaround time to get the approval depends entirely on how legally accurate your VAT Registration application is. We at Protax ensure that VAT Registration application of client is 100% accurate at the time of applying so turnaround time can be reduced to minimum.
Types of VAT Registration
A) Mandatory VAT Registration
Any business is require to get register if they fall into the following classifications:
- For over the 12-month period, the taxable supplies of the business go beyond the mandatory registration threshold, or
- The business also expects to make taxable supplies in the next 30 days that will have a value that is more than the mandatory registration threshold, or
- The amount of mandatory registration threshold is AED 375,000.
B) Voluntary VAT Registration
Any business that doesn’t meet the mandatory registration criteria and falls into the following classifications may opt for a voluntary registration:
- In the previous 12-month period, their taxable supplies or taxable expenditures are worth more than the voluntary registration threshold, or
- The business expects for their taxable supplies or taxable expenditure for the next 30 days to be worth more than the voluntary registration threshold, or
- The amount for the voluntary registration threshold is AED 187,500.