The United Arab Emirates (UAE) has created the most favorable conditions for doing business: simplified bureaucratic procedures, no restrictions on capital withdrawal, the possibility of 100% ownership in free zones, etc. The overall tax burden here is much lower than in most other countries, but some familiar taxes remain, such as value-added tax (VAT). Companies doing business in the country must register and pay it regularly. The rates for different groups of goods and services, the registration procedure, declaration filing, and sanctions for failure to comply with the prescribed standards are all regulated by Federal Law-Decree No. 8 of 2017 (the VAT Law). The body responsible for regulating the tax system nationwide is the Federal Tax Authority (FTA).
The law mentioned above, in particular, regulates business registration for VAT payments. The procedure will require you to prepare, collect, and submit documents, communicate with the FTA, and meet prescribed deadlines and other requirements. Although at first glance it seems straightforward, this process still has nuances you need to remember. Alliance Business Advisors' specialists will help you quickly complete all necessary procedures without issues or delays. Our team of experts will accompany you throughout the process and ensure you meet all requirements and receive your VAT number without issues, in the shortest possible time.
Why and who needs a VAT number?
According to Federal Law-Decree No. 8 of 2017, all companies in the UAE with annual turnover exceeding AED 375,000 (or expected to exceed this figure in the next 12 months) must register for VAT. Companies with annual turnover between AED 187,000 and AED 375,000 can also complete the registration process (optional).
Any legal entity can operate under only one VAT number at any given time. The exception is when several entities work together in a group structure; in that case, they can apply for a group VAT number, which is assigned to all group members.
Accuracy and correctness of VAT registration documents are crucial; errors in the process can result in application rejection or a fine. Alliance Business Advisors is ready to assist you with the VAT registration process and ensure that VAT returns are submitted on time and in compliance with all FTA rules.
Registration for a VAT number
Before starting, you need to contact our consulting company for an initial consultation. If the assessment shows that the annual turnover exceeds AED 375,000 or is expected to exceed this threshold, registration is mandatory.
The next step is to collect a package of company documents. The standard list includes*:
- Copies of passports and Emirates ID of shareholders and the company manager.
- Company bank account details.
- Copies of statutory documents.
- Copies of the company license.
- Documents confirming the company's turnover for the last 12 months.
* In some cases, additional documents may be required; our consultant will notify you of that.
Our specialists will verify the accuracy of execution and the completeness of the package of documents, after which you can proceed to the next step.
The registration process is conducted online via the FTA EmaraTax portal. You will need to complete the registration form and, after supplementing the application with the collected package of documents, submit everything to the FTA. You will also incur a standard commission for this service. Our specialists will ensure that everything is done correctly, and as a result, you will receive confirmation and your tax registration number (TRN). In the future, this number will be used to submit declarations and VAT payments.
Conclusion
Here, we outline the process for obtaining a VAT taxpayer number and its importance for your business. Timely registration will help you avoid fines and run your business smoothly and without delays. Alliance Business Advisors' consultants are experienced specialists ready to assist you and quickly resolve any VAT-related issues in the UAE. Entrust this issue to professionals and free up your time for more important matters - developing your own business.
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Frequently asked questions
Who is required to obtain a VAT number in the UAE?
Under current law, VAT registration is mandatory for companies with an annual turnover exceeding AED 375,000. If your business's annual turnover is between AED 187,000 and AED 375,000, you can register voluntarily.
What is the standard VAT rate in the UAE?
The standard VAT rate in the UAE is 5%. Certain goods are subject to a preferential 0% VAT rate, and others are fully exempt from VAT. Our consultant will provide more details.
How does the VAT registration process differ in different Emirates?
Nothing. VAT registration is the same in all Emirates (Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Ajman, Fujairah, Umm Al Quwain).
How long does it take to get a VAT number?
VAT registration usually takes from 1 to 3 weeks. Our team of professionals will guide you through the entire process and advise you at every stage.
What does a VAT registration number look like in the UAE?
The Tax Registration Number (TRN) is a unique identifier for a VAT-registered company in the UAE and consists of 15 digits. The first 3 digits are the tax authority identifier, the next 9 are the company identifier, and the last 3 are verification digits. The number is assigned by the UAE Federal Tax Authority.
What are the penalties for late VAT registration?
Failure to register for VAT on time will incur a penalty of AED 10,000 immediately, plus an additional AED 1,000 for each subsequent month of delay. Our experts will help you complete everything on time and avoid penalties.
How is VAT calculated?
The standard VAT rate is 5% on taxable goods and services supplied within the UAE. At the end of each accounting period, you will need to calculate a refund, which is the difference between the VAT collected from customers and the VAT you paid to suppliers. If this figure is negative, you should receive a refund.
