VAT in UAE

If you have ever purchased something from the store and checked the receipts, you will find that in addition to the price, you are also charged a VAT. But what is a VAT? 

VAT stands for value added tax and is a tax levied on consumers. It is an indirect tax which means that the producers pass on the burden of VAT, levied by the government, to their customers. 

As a businessman conducting small, medium, and large-scale operations, it is a responsibility to obey tax laws and contribute to the greater welfare of society. In UAE, there are several business tax-free zones and therefore have attracted investment from abroad. VAT ensures that your business is recognized by the government. If you are not clear about vat registration requirements and its importance, this article will help you out! 

VAT Registration in Dubai

Dubai is a business-friendly city and a Center of world attraction. Luckily, the tax laws in Dubai are according to the canons of international principles and are cost-efficient, effective, and transparent. The obligation to register for VAT in Dubai may vary according to your company’s turnover to avoid any disincentive for organizations. Moreover, VAT registration requirements in Dubai are simple and transparent alongside convenient. Businesses have several options when it comes to VAT Registration in Dubai such as online form filling. Once your company has been registered successfully, you will receive a VAT certificate which will confirm your social responsibility fulfillment. 

Documents required for VAT Registration in Dubai 

VAT Registration requirements include some of the legal and business documents for the company to provide to the Federal Tax Authority. These documents will be required when filling out the online VAT registration requirement form. Here are some of the documents required for VAT registration in UAE

  • Trade license copy. 
  • Copy of passports of the business owners and partners. 
  • Copy of Emirates ID held by owner and partners.
  • Company’s Article, Memorandum of Association. 
  • Company contacts details.
  • Bank account details.
  • The income statements that show the transactions for the last 12 months.
  • Nature of business and activities performed.

It should be noted that not all documents might be required at once. Considering the nature and type of businesses, they may vary. 

Importance of VAT Registration in Dubai 

Some businessmen consider it an expense to pay tax. Little do they realize that registering their organizations for VAT can provide numerous benefits. 

Firstly, it boosts the company’s profile. Of course, companies can show off their VAT registration to relevant stakeholders which will improve their reliability and customer preference. Customers are more likely to choose a firm that has registered for VAT than a company with no VAT certificate

Moreover, tax evasion can sometimes be considered a crime and if found guilty, the company may be subjected to huge financial penalties. Registering your business for VAT in Dubai avoids these circumstances and ensures your business thrives and at the same time, benefits the community. 

It should be noted however that the purpose of the VAT is not to place a burden on businesses. One may claim VAT refunds under special circumstances. 

All in all, it helps the business grab a larger market and improve its reputation, which ultimately leads to an improved customer base.

Who should register for VAT in Dubai? 

VAT registration requirements in Dubai depend on your company’s turnover. If your company’s imports are above 375,000 AED, it is obligatory to register for VAT. If your company’s imports are less than 375,000 you do not require to register for VAT, although if you want to volunteer for it, you may apply. 

VAT Registration process online in UAE 

VAT Registration can be done online conveniently, by filling out an online form containing necessary details and documents. You must attach all the relevant documents required (discussed above) and fill in the necessary details which will include details of the applicant’s contact number, bank accounts, etc. 

Once this is done, the form is sent to FTA for review and scrutinization. Once the form is approved, you will be issued a VAT certificate, confirming that you are now a taxpayer.

How to Register VAT in Dubai?

Interested applicants can register for VAT through the Federal Tax Authority’s online portal and by providing documents required for vat registration in UAE. You can obtain this by providing your email address and the portal’s credentials will be emailed to you so you can access the form. The good news is that the entire registration process is online! 

Why JAXA 

JAXA is a professional firm that provides accounting services to businesses all around the UAE. The slightest mistake in the form may lead to starting all over again. For this reason, JAXA is the best option for VAT Registration as it boasts a team of professionals who ensures that your company’s documents are transparent, up to date, and professional.

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