Taxation is a very important topic for all businesses to understand. A proper understanding of the tax rules and regulations of jurisdiction can affect a business in a huge manner. This is why it is very important for businesses, especially the ones which are looking forward to establishing a new business, to gain complete knowledge of the Tax situation in the jurisdiction in which they have chosen to set up a business.
The United Arab Emirates is considered one the best places to start a new business as it provides a gateway to the markets in the Middle East. The government of the country is also trying to provide more benefits to businesses which are coming from different parts of the world and making changes to the law so that the business, as well as the economy of the country, is benefitted.
One of the latest changes made to the taxation policy of the country is the addition of value Added Tax (VAT) in the UAE. VAT was first introduced in the UAE on 1st January 2018 with the intention of simplifying the taxes which have to be paid by the businesses. It also creates a new source of income for the government and will allow more spending from the side of the government.
In the current state, all the businesses which are present in the United Arab Emirates or are registered in the country must check the total revenue made by them and if eligible must register themselves for VAT. To know more about the eligibility criteria for VAT you can read our blog titled “How to Register your company for VAT?”
After the registration process is complete, the registrant will receive a TRN number. This number will only be available after the VAT registration process is completed. It is an unsaid rule that all companies in the UAE must have a TRN number.
Let’s get a detailed understanding of TRN and how a company can receive it.
What is a Tax Registration Number (TRN)?
Tax Registration Number (TRN) is an exclusive number that has been issued to the entity that has been registered for VAT in UAE by the Federal Tax Authority, UAE (FTA). It is a 15-digit number through which the FTA will be able to differentiate you from other businesses during the tax procedure. The entity to whom the tax number is issued is called a “Registrant”, and it should always mention the TRN in the various documents which have been set by the government. Example of such documents include VAT returns, Tax Invoice, Tax Credit Note, etc.
This number will be automatically issued to you after you register for VAT in Dubai and this TRN will allow the government to keep track of all the transactions which have been made by a business. Only the traders or companies which have received their TRN certificate are allowed to charge VAT to the customers.
Procedure to Apply for TRN
The process of obtaining a TRN has been made simple as the Registration Process can be now conducted online. The business needs to register online with the FTA for completing the registration process. In order to register for VAT online, you need to follow simple steps which are mentioned below:
Login to your E-Services Account
The first step is to create an account on the online portal of the Federal Tax Authority. For the creation of an account, the business needs to provide some details such as the email id and password for the account. After providing the details you will be receiving your login credentials for your account in the email mentioned previously.
Click on Register for VAT
After logging in to your account, there would be a clickable button named register for VAT present on the screen. You need to click on this button which will bring forth a guide that will assist you to get started with VAT. This guide will help you understand the features of VAT in the UAE. After reading the complete guide, you need to tick “'Click Here” to confirm you have read the getting started guide” and click on “Proceed”.
Fill out the necessary details in the VAT Registration Form
After clicking on “Proceed”, a registration form will open in front of you. This form comprises eight different sections in which the business need to provide the necessary and appropriate details. Once all the necessary details are filled in one page, the portal will allow you to move to the next page. Track of the registration process can be kept easily like the pages that have been completed will be marked by a green tick mark. After filling all the pages, you need to click on “Submit for Approval”.
This would send the completed registration form to the FTA, which will scrutinize the form and will send you a mail of approval. After the approval, the entity is registered for VAT in UAE and receives a TRN and VAT registration certificate stating the number. This number would be used to identify you and your business among the various businesses.
Let’s have a look at the documents that you should keep prepared to make the registration process easy.
Documents to be Prepared
To register for VAT, there are some documents that are needed to be scanned and uploaded to the FTA. The process for registration is an online process, and there is no need for any physical presence or any physical presentation of a document.
Below is a list of the most common documents which a business needs to prepare during the registration process:
- Registered Email ID
- If the applicant is a company, copies of legal documents such as trade license, share certificates, Memorandum and Articles of Association etc.
- Passport copy and Emirates ID of owners/shareholders
- Copy of power of attorney, passport and Emirates ID of the manager/authorized person as well as the mobile number.
- Turnover declaration letter containing sales figures from 2017 as per FTA format
- Supporting documents for the revenue
- Projected Future Revenues with supporting documents like confirmed purchase order.
- Details of Bank Account including IBAN number
- The registered address of the company ( Building name, office No, Street, P.O Box and Phone number)
- Customs Details will be required only if the Company deals in such kind of business.
These documents are required for the registration for VAT. The number of documents may vary concerning the nature of the business.
With the recent amendments in the law, registering for Vat in UAE is extremely important for a company as without registration they will not be allowed to collect VAT from the customers. It should also be taken into consideration that even the slightest mistake in filling out the registration form will lead to the dismissal of the form, and the company will have to start over again. So instead of doing the process themselves, a company should hire the services of a firm that would help you in getting registered for VAT.
In case you are looking for such a financial firm then JAXA Chartered Accountants can help you. The experts at JAXA aim to provide the best services to a business which will allow your business to reach its maximum potential and will also ensure that the business faces no problem in the taxation department.
Apart from helping you in the VAT registration, we also provide you with a range of services such as Audit and Assurance Services, Tax Service, etc. To know more about the various services offered to us, do contact us - we would be glad to help.