VAT Registration Requirements to be Fulfilled in UAE

The introduction of VAT has been relatively recent, but the impact of VAT in UAE is enormous. The VAT implementation was done at a standard rate of 5% (except certain items which are taxed at 0% or are exempted under VAT) from 1st January 2018. This rate was decided by all the GCC countries together and was first implemented by Saudi Arabia and then followed by the United Arab Emirates. Slowly all the other GCC countries are getting ready to enforce this new law.

VAT Registration Requirements

According to the law of the country, the VAT registration should be done of the businesses depending on the size of the business, but it is recommended that register themselves with the Federal Tax Authority UAE and receive a VAT registration number. The companies that need to register for VAT have been divided into three parts:

1. Mandatory VAT Registration

In case the revenue of any business is AED 375000 or more, in such a case the business is legally responsible for registering for Value Added Tax.

2. Voluntary VAT Registration

The voluntary registration threshold has been kept at AED 187,500. Any business that generates revenue of AED 187,500 or more can register itself for VAT but is not obligated to do so.

3. Exempted from VAT Registration

Any business that generates revenue less than AED 187,500 need not register for VAT in UAE.

Registering for VAT is recommended for all the companies irrespective of the revenue as it is beneficial for the business in the long run.

Documents Required for VAT Registration

According to the VAT Decree Law, the taxable person shall keep the following records:

  1. All Tax Invoices and any alternative documents related to the receiving of the Goods or Services.
  2. All Tax Credit Notes and alternative documents received related to the receiving of the Goods or Services.
  3. All Tax Credit Notes and alternative documents issued related to the receiving of the Goods or Services.
  4. All Tax Invoices and alternative documents issued related to the receiving of the Goods or Services.
  5. The records of any Taxable Supplies made or received.
  6. The records of Goods and Services that have been disposed of or used for matters not related to Business and showing the taxes paid for the same.
  7. The records of Goods and Services purchased and for which the Input Tax was not deducted.
  8. Every Record of the supplies and imports of Goods or Services.
  9. The records of all Goods and Services exported to foreign countries.
  10. The records of adjustments or corrections made to any accounts or Tax Invoices.
  11. A Tax Record that includes the following information:
  • Due Tax on Taxable Supplies.
  • Due Tax after the error correction or adjustment.
  • Recoverable Tax for supplies or Imports.
  • Recoverable Tax after the error correction or adjustment.

The above mentioned are the complete documents that you would require if you want to want to get through your VAT registration process without any hitch. Having the documents beforehand would decrease the total time it takes to get registered for VAT and lessen the hassle that you may need to go through. It is also suggested that you must first survey the market and figure out what are the various alternatives and options available to you.

VAT registration can be a bit of a complex process depending upon the nature and size of the business and also improper VAT filing may affect the future of the business. This means that a company should prefer to avail the VAT related services from a good and reputed firm only. One such firm which would help you understand everything about VAT and would provide you customised vat consultancy services in UAE is “JAXA Chartered Accountants”

At JAXA, the VAT consultancy team will take care of all your queries and will leave you in peace so that you can properly focus on the growth of your business. The various other services which they provide such as Audit and Assurance Services, Tax Services, etc. would take your business to new heights. JAXA has a very professional approach towards any problem the client puts forth and provides a customised solution for its clients. To know more about the various services “JAXA” would provide you please contact us, we’d be glad to assist you.

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