VAT or Value Added Tax was introduced by the Government of the UAE. The UAE VAT law requires businesses having taxable supplies and imports worth over AED 375,000 to register under the VAT regime. VAT registration in UAE for new companies can be done in the official portal.
The process of VAT registration is a two-step process. As the first step, you will have to create an e-services account, followed by which you can proceed with the VAT registration process.
To create an e-services account with the FTA, you will have to sign up on their official website by entering your details like your email Id, password, and security code. You will then receive a verification email, indicating the successful set-up of your e-services account.
You can then log into your account with your credentials for continuing with your registration process. VAT registration is a crucial step for businesses and can be quite complicate for beginners. You can always seek help from experienced VAT consultants in Dubai.
Start your VAT registration process by logging into your e-services account and clicking on the Register for VAT option.
You will then get a screen that displays a guide on VAT registration. You can go through the guide and then proceed with the registration process.
On the next screen, you will get the VAT registration form, which has the following eight sections:
- Business type
- Applicant details
- Contact details
- Bank details and statements
- Business relations
- Business details
- Review and submission
After filling in the required details, you can review them and submit them in the portal. The process of VAT registration does not carry any charges. However, you will have to pay VAT registration fees in UAE of AED 500 to obtain an attested registration certificate.
After the registration process is over, you will be assigned a VAT registration number for your business. You can find your VAT registration number in the registration certificate.
KGRN is a pioneer legal service provider in the UAE. We provide VAT services in Dubai with our well-experienced and knowledgeable professionals. We also have a great team of VAT consultants in Dubai, who are here to clear your queries round the clock.
UAE VAT updates
The UAE government introduced VAT or Value-added tax as the tax regime for every type of business and entity. It was introduced , with the vision of bringing order to the tax system of UAE’s businesses and registered organizations. Moreover, the standard rate of VAT for registered entities in the UAE is about 5%. However, some companies like those falling under the zero-rated sectors and VAT exemption sectors like local passenger transport are not obliged to pay Value-added tax.
Who needs to pay VAT in the UAE?
- Any business whose taxable supplies and imports exceed AED 375,000 per annum must pay VAT.
- Entities having taxable supplies and imports whose value exceeds AED 187,500 per annum can also pay VAT, but it is optional.
VAT exemption in UAE:
The UAE VAT law exempts businesses in the zero-rated sector and the VAT exempt sector from paying the Value-added tax. Other than that, entities whose annual turnover is less than AED 187,500 are also exempted from paying VAT.
The Zero-rated sector:
The businesses that supply zero-rated goods and services need not pay VAT to the UAE government, but they still have a provision to reclaim their input VAT.
The following businesses and organizations fall under the zero-rated sector:
- Export of goods and services outside of the UAE
- International transport and certain sea, air, and land transports
- Investment-grade precious metals like gold and silver
- Newly constructed residential property that is handed over within three years of its construction
- Certain health care and educational services and related goods
The VAT-exempt sector:
The suppliers of VAT-exempted goods and services need not register under VAT or file their VAT returns.
The following businesses and activities fall under the VAT-exempt sector of the UAE:
- Certain financial services clarified in the VAT legislation
- Residential properties that are excluded from the zero-rated sector
- Bare land
- Local passenger transport
New VAT rules in UAE, 2020:
- Ever since the outbreak of COVID-19, the VAT on masks, sanitizers, and primary healthcare has become zero.
- The UAE government recently released guidance reminding the businesses of the UAE VAT law, stating that VAT is obligatory.
- Since some businesses started advertising that they offer VAT exemptions to customers, the government released the above-mentioned guidance stating that VAT is a must for all businesses.
- The government also updated the UAE VAT law by including the guidance for VAT registration for sole establishments.
- The FTA stated that the new regulations will review the positions of sole establishment owners when they obtain multiple VAT registrations.
- Oman has currently joined the list of countries implementing VAT. The country’s tax authority has issued a notice to release further guidelines on the same.
- The FTA UAE has also made provisions for companies to contact them directly at any time for clearing their queries on the current VAT rules.
KGRN is one of the renowned legal firms in the UAE. We have a team of well-experienced and knowledgeable auditors and accountants who have expertise in various sectors, including VAT services in the UAE.
Our experts assist companies and entities in the UAE in VAT-related issues, including VAT registration and VAT return filing. Contact our professionals for further details and assistance on your VAT related queries.
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