VAT Registration Essentials in the UAE

The introduction of VAT in the UAE, which began on 1st January 2018 at a standard rate of 5% (with some items taxed at 0% or exempted), has significantly impacted its business landscape. This VAT rate was a collective decision by the GCC countries, first embraced by Saudi Arabia, followed by the UAE. Gradually, other GCC nations are aligning with this fiscal change.

VAT Registration Criteria

As per UAE law, businesses should register for VAT based on their size. However, it’s advisable for all entities to register with the Federal Tax Authority UAE to obtain a VAT registration number. There are three primary categories:

1. Mandatory VAT Registration: Businesses generating revenue of AED 375,000 or more are legally bound to register for VAT.
2. Voluntary VAT Registration: Those with a revenue between AED 187,500 and AED 375,000 have the option but aren’t compelled to register for VAT.
3. Exemption from VAT Registration: Entities earning less than AED 187,500 aren’t required to register.

Registering for VAT is beneficial for businesses in the long run, irrespective of their current revenue.

Documentation for VAT Registration

The VAT Decree Law mandates that businesses maintain:

• All Tax Invoices and related documents concerning the receipt of Goods or Services.
• Tax Credit Notes received or issued pertaining to Goods or Services.
• Details of Taxable Supplies transacted.
• Records of Goods and Services not related to Business, with taxes paid for the same.
• Details of Goods and Services purchased where Input Tax wasn’t deducted.
• Documentation of supplies and imports of Goods or Services.
• Details of Goods and Services exported.
• Adjustments or corrections made to accounts or Tax Invoices.
• Comprehensive Tax Record, including:
  • Due Tax on Taxable Supplies.
  • Due Tax after corrections.
  • Recoverable Tax for supplies or imports.
  • Recoverable Tax after corrections.

Having these documents beforehand streamlines the VAT registration process, saving time and minimizing potential complications.

VAT registration complexity varies depending on business nature and size. Improper VAT filing could jeopardize a company’s future. Thus, businesses should engage with reputable firms for VAT-related services. One firm that stands out for its expertise in this domain is Taxfix.

Why Choose Taxfix for VAT Consultancy?

Taxfix’s VAT consultancy team alleviates your VAT concerns, allowing you to focus on business growth. Offering services like Audit and Assurance and Tax Services, Taxfix’s tailored solutions can elevate your business. With a professional, client-centric approach, Taxfix delivers custom solutions for every challenge. To understand how Taxfix can assist you, don’t hesitate to reach out. We’re here to help.