Do I have to register for VAT in the UAE?

Do I have to register for VAT in the UAE?

Being registered for VAT in the UAE means that the Federal Tax Authority (FTA) recognises that a company has reached a turnover threshold and is authorised and/or required to collect VAT from its customers and remit the same to the government.

Do all businesses have to register for VAT?

No, not all companies in the UAE need to register for VAT. There are those that have reached a turnover threshold that requires them to register for VAT, those that have reached a turnover threshold that allows them, voluntarily to register for VAT and those that have yet to reach the minimum threshold who are exempt from VAT registration.

Mandatory VAT registration

VAT registration is mandatory for all businesses whose taxable supplies and imports for the previous 12 months exceed AED 375,000 or if any company expects to exceed the threshold in the next 30 days.

Voluntary VAT registration

Businesses can voluntarily register for VAT in the UAE if their taxable supplies and imports for the previous 12 months exceed AED 187,500 but do not reach the mandatory threshold of AED375,000. Or if the company expects to reach the threshold in the next 30 days.

What types of businesses are required/eligible to register for VAT?

For the purposes of VAT registration, a business is defined as any activity conducted on an ongoing basis and can be industrial, commercial, professional or trading related. This includes:

1. Sole Proprietorships
2. Partnerships
3. Limited Liability Companies
4. Clubs and Associations
5. Trusts
6. Non-profit organisations
7. Any other types of businesses

What defines taxable supplies?

Taxable supplies are used to determine whether there is a requirement for VAT registration and refer to the supply of goods or services to customers as part of a company’s business activities.

For the purposes of determining if a product or service transaction is within the requirement for tax to be levied, it should be:

• a) A product that is classified as taxable and not on the list of exempt supplies. Goods and supplies that are exempt from UAE VAT are:
• Financial services (including financial benefits which do not imply a fee, e.g., discounts, commission, rebates or similar)
• Residential buildings
• Empty land
• Local passenger transportation
• b) Supplied by a person who is registered for VAT.
• c) Supplied within the UAE.
• d) Supplied for a consideration (fee).
• e) Supplied as part of carrying out a business activity.

Are non-GCC resident require to register?

The VAT thresholds are not applicable to businesses that are not resident in the GCC. However, any non-resident business will be obliged to register if:

• a) It makes supplies of goods or services in the UAE (irrespective of their value); and
• b) There is no other person, acting on the business’ behalf, who is required to account for the VAT due in the UAE.

How to register for VAT in the UAE

To facilitate registration, businesses can submit an online application to the Federal Tax Authority (FTA). This can be done by following these steps:

1. Go to www.tax.gov.ae and select ‘eServices’.
2. Create an eServices account or login to your existing account.
3. Select the ‘Register for VAT’ option to begin the process.
4. Read the ‘Getting Started’ guides and confirm when you have finished.
5. Complete the VAT registration application form and submit the application for approval.

When you have submitted your application, you can check on its status by looking at the Dashboard page of the eServices portal.

If you need assistance with VAT registration in the UAE, or any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or Saudi Arabia, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.