Designated Zones for the purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax

Based on:

– Cabinet Decision No. (59) of 2017 on Designated Zones for the purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective 1 January 2018); and

– Cabinet Decision No. (35) of 2018 on Amending the List of Designated Zones Annexed to the Cabinet Decision No. (59) of 2017 on Designated Zones for the purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective 18 June 2018*).

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Tourist VAT Refund Scheme – Guide for UAE Retailers

VAT refund scheme in UAE makes it possible for eligible tourists to receive a portion of VAT as a refund for products bought at registered stores. VAT amount can be claimed from an electronic system, at designated spaces, without any human interference. Once tourists submit the required documents, the digital system decides whether the taxes are eligible for refund and if yes, reimburses the tourist visa cash or credit card.

WHICH TOURISTS ARE ELIGIBLE FOR SCHEME?

Tourists Should meet the following criteria to become eligible for a VAT refund.

• Tourist must be above the age of 18 years and not resident in the UAE.
• Crew members on flights leaving the UAE are not eligible to claim.
• GCC Nationals are eligible. Please note that there may be restrictions on UAE nationals who are resident abroad for the purposes of studying.

All taxable goods are eligible for tax refunds except for:

• Goods that have been consumed, fully or partly, in the UAE or any Implementing State;
• Motor vehicles, boats and aircrafts;
• Goods that are not accompanied by the Overseas Tourist at the time of leaving the Emirates.

Validity 

• The minimum purchase amount is AED 250.
• Once a Tax-Free Tag is issued, the tourist has 90 days from the date of issuing to export the goods. If not done, the Tax-Free Tags will expire, and the refund will not be made.

Refund Amount and Fees

Tourists will receive 85% of the tax paid, minus a fee of 4.80 AED per tax free tag validated. Maximum limit for cash refund is AED 7,000 per tourist.

PROCEDURE FOR RETAILERS TO JOIN THE SCHEME

1. Need to submit request to join the scheme online and be subject to a credit check
2. Issue a sales receipt at the point of sale and affix a Tax-Free tag
3. Adjust the VAT applicable under tourist refund scheme while submitting the VAT return

1-Four Conditions for Retailers Registration under Scheme

The following are the conditions identified for registering under the tourist refund scheme.

1. The retailer must be registered with the Authority for VAT and have a tax registration number (TRN)
2. The supplier’s sales of goods must not be excluded from the refund scheme, as determined by the Authority
3. The retailer must submit a request to participate in the Scheme as determined by the FTA
4. The retailer must meet the financial credit requirements specified by the system operator and be committed to submitting Tax Returns and paying due taxes regularly

How the system works:

Step1: A tourist makes a purchase eligible for a “Tax Refund”
Step2: The retail store captures tourist information using the system
Step3: The retail store enters the transaction purchase price
Step 4: The retail store generates a QR code tax free tag and attach on the back of the sales receipt.
Step 5: The retail store scans the QR code to link the transaction with the tourist’s passport details
Step 6: Tourist will present  sales receipt at any Tax Refund Kiosks in airport, seaport or border crossing. (Please note that the tourist may be subjected to a further validation check and may need to produce the goods for inspection.)

2-Who can issue Tax Free tags?

• Any retailer registered for VAT with FTA, and who is regular in filing the return and paying due tax to authority
• Seller of goods eligible to receive tax refunds as determined by the FTA

Issuing a Tax-Free Tag

Planet will offer 3 ways to issue a Tax-Free Tag to eligible tourists:

• Through an app downloaded to a mobile phone
• Through a web application on a computer browser
• Integration with selected POS software and payment providers

All issuing solutions must collect the following data when a tag is issued:

• Tourist details (ID number & country of residence as a minimum)
• Transaction details (Receipt no. & full sales amount including VAT)
• Tax Free Tag ID (Stickers with tag IDs are provided in the starter pack)

3-VAT Return Filing – Tax Refund for Tourists Scheme

Tax Refund for Tourists scheme is applicable only for businesses who are registered and enrolled under the official tourists refund scheme.

• Upon the sale of goods, the Retailer issues a sales receipt with the tax refund tag affixed to the back to tourists and account for output VAT accordingly.
• The Overseas Tourist requests their VAT refunds directly from the Operator and Operator shall seek reimbursement of the VAT amount refunded to the Tourist directly from the Retailer who sold the goods.
• Retailers shall reimburse the VAT amount to the Operator, and adjust  the amount as a reduction of output VAT that arises in the tax period in which the refund was paid, under Box 2 of the VAT return.
• Box-2 refers to the amount of the tax refunds made available to visitors under the “tax refunds for tourists’ scheme”. Mention the tax amount that has been refunded to the tourists under the column ‘VAT Amount.’ 
• Within this box, the number reported should always be negative. This sum would reduce the overall liability of output tax.
• Businesses who are not registered and enrolled under official tourist refund scheme, the box 2 will not be applicable. In such case, mention nil values (0) which are auto-populated.

Source :  xpertsleague.com

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New Residence VAT Refund Scheme for UAE Nationals

The New Residence VAT Refund Scheme is a Special Refund Scheme available in UAE VAT Law. This scheme is applicable only to UAE Nationals who construct a Residential Building for his/her or for his/her family.

This is applicable when the person owns or acquires land in UAE on which he builds or commissions the construction of his own residence. Under this scheme, such a person will be entitled to claim a refund of the tax paid on the expenses of constructing the residence.

 Conditions to be Eligible:

1. Refund request should be submitted by a Natural Person
2. He/she must be UAE National
3. Tax Refund is in respect to the Expenditure incurred for constructing Residential Building
4. Residential Building should be used by his/her or his/her family members for Residence

Eligible Expense for a Refund:

The VAT incurred for the following categories of expenses while constructing a new residence by a UAE National are eligible for VAT Refund under the scheme:

Below Content Source: FTA USER Guide

• Services of builders
• Services of architects
• Services of engineers
• Supervisory services
• Other similar services necessary for the successful construction of the residence
• Building materials that make up the fabric of the property (e.g. bricks, cement, tiles, timber)
• Central air conditioning and split units
• Doors
• Decorating materials (e.g. paint)
• Dust extractors and filters
• Fencing permanently erected around the boundary of the dwelling
• Fire alarms and smoke detectors
• Flooring (excluding carpets)
• Guttering
• Other heating systems
• Kitchen sinks, work surfaces and fitted cupboards
• Lifts and hoists
• Plumbing materials
• PowerPoints
• Sanitary units
• Shower units
• Window frames and glazing
• Wiring when embedded inside the structure of the building

Expenses which are Not Eligible -Examples:

• Furniture which is not affixed to the building such as sofas, tables, chairs, bedroom furniture, curtains, blinds, carpets
• Electrical and gas appliances, including cookers
• Landscaping, such as trees, grass and plants
• Free-standing and integrated appliances such as fridges, freezers, dishwashers, microwaves, washing machines, dryers, coffee machines;
• Audio equipment (including remote controls), built-in speakers, intelligent lighting systems, satellite boxes, Free view boxes, CCTV, telephones
• Electrical components for garage doors and gates (including remote controls)
• Garden furniture and ornaments and sheds

Retention payments:

In certain circumstances, a UAE National may be required to make retention payments to its contractors following the expiration of the 6-month period from the date of completion of the new residence.

In this regard, the FTA clarifies that where the UAE National intends to make such payments, the UAE National should indicate so during the submission of the initial request for the refund.

Additionally, care should be taken about the timeline for the recovery of retention payments. The VAT incurred on such payment can be recovered within 6 months from the date of making the payment subject to the provision of proof thereof, for example, a receipt.

 Time Limit:

VAT Refund claim under this scheme is required to be lodged within 6 months from the date of completion of the newly built residence. A newly built residence is considered as completed on:

• the date the residence becomes occupied (or)
• the date when it is certified as completed by a competent authority in UAE; whichever is earlier

Change of Use:

When a person who has claimed refund of VAT under this scheme, later uses the property for commercial use, he/she will be required to repay the tax that was refunded earlier.

While applying for refund one has to declare type of fund being used for the construction either personal or Housing Program Fund or both. Funder certificate needs to be provided if the construction is backed by Housing Program Fund.

Besides this bank account confirmation letter/certificate should be submitted for the confirmation and transfer of fund into the account.

The new residence VAT refund scheme is an assistive scheme for UAE nationals who newly construct their residence in UAE. They can reduce the expenditure incurred on account of VAT paid on the expenses of constructing the new residence. It is also a measure by the UAE Government to assist UAE nationals to construct residences. UAE nationals can note the conditions of this scheme and use it for their benefit.

How to apply / Application Process:

• Applicant has to submit the “New residence VAT refund request” to FTA on its E-service portal by creating a new taxable person account/special refund.
• Information regarding the applicant and the property has to be submitted along with the refund request.
• After the refund request has been submitted, FTA will review and will send an email asking any further information required.
• Once the FTA has reviewed and approved the eligibility of your refund application, it will be forwarded to verification body (third party) for further checks.
• During this verification additional documents may be requested by the verification body to check the application such as contracts, invoices, proof of payments etc.
• Verification body will review and submit the report to FTA about the application within 10days from receipt of documents.
• FTA will take further 10 days to make a decision after receiving report from Verification body
• Following this, if approved by FTA the refund will be transferred to the applicant within 5 business days.

Documents Required to be submitted for VAT refund claim by a UAE national on building new residence

Initially while applying for the refund, the applicant is expected to submit the below documents along with the refund request. 

• Copy of Emirates ID and family book
• Copy of declaration from the funding body or institution, if the construction was funded by any such body or institution
• Copy of the construction plan 
• Copy of the completion certificate and building permit of the property
• Proof to identify the applicant as the owner of the plot of land in which the building was constructed
• Document stamped by bank to identify the bank account details
• Document to evidence the date the building is occupied as applicable

It is to be noted that the authority may ask for additional documents or clarification on later stage during their verification of the refund applic

Source : xpertsleague.com

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Dubai Customs released guidance (Notice no. 1/2021 (14 January 2021)) concerning the submission of customs declarations and required documents.

The guidance reinstates the process initiated by Notice 1/2018, requiring the submission of customs declarations. Notice 1/2018 was suspended, as part of the government’s response to the coronavirus (COVID-19) pandemic by Notice 2/2020 which paused the requirements to submit customs declarations.

Notice no. 1/2021 revokes the suspension allowed under Notice 2/2020 and reinstates the customs declaration requirements beginning 31 January 2021. As of that date, businesses will have to submit customs declarations and other required documents to Dubai Customs within 14 days of processing of the customs declaration on the Mirsal2 portal. Once the 14-day period lapses, a daily late charge will be applied.

Special rules apply for customs declarations completed between 29 March 2020 and 31 January 2021.

News Courtesy :  KPMG

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Since the implementation of VAT in UAE, the VAT301 form has been available on e-services portal to manually process the VAT payment on Customs Declarations using the Tax Registration Number (TRN).

Recently, Federal Tax authority (FTA) has communicated with the taxpayers that the VAT301 form will be discontinued shortly for users who have a valid TRN and were using this form earlier for settlements via their VAT returns.

For the VAT registrants who already have a valid TRN, in order to continue being able to import goods via customs, they will need to ensure that their custom code is linked to their TRN.

If a registrant does not have a customs code, it will require registering with the Customs Department and linking their new customs code with their TRN.

Alternatively, one will only be able to import goods via a clearing company that is registered with the FTA or only use form VAT301 to utilize the payment option.

Below entities can still request to open form VAT 301 for VAT settlements based on customs declaration through FTA online services:

• Designated entities exempted by FTA.

• Free zone Companies that exports through land to GCC Countries from designated zones for the VAT purpose.
• FTA approved shipping and clearance agencies to clear shipments of on behalf of registered and non-registered importers with FTA.

To submit application to open VAT301 form, there is a form “VAT 301 settlement access form” which is available on FTA website.

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The tax authority of the United Arab Emirates (UAE) issued a clarification (VATP023) concerning value added tax (VAT) and the temporary zero-rating of VAT for certain medical equipment.

The clarification prescribes that the supply or import of certain personal protective equipment during the period from 1 September 2020 to 28 February 2021 and used for protection from the coronavirus (COVID-19) disease is considered to be medical equipment subject to VAT at a zero-rate (0%). Eligible medical equipment is limited to the following items:

• Medical face masks
• Half-filtered face masks
• Non-medical “community” face masks (made from textile)
• Single-use gloves
• Chemical disinfectants and antiseptics intended for use on the human body (but excluding detergents, cosmetics, and personal care products)

A supply or import outside the “specified period” (before 1 September 2020 or after 28 February 2021) is subject to VAT at a rate of 5% (under the general VAT rules).

The application of the VAT zero-rating is effective retroactively from 1 September 2020. In situations when a supplier is aware of the identity of a recipient of eligible equipment, a tax credit note is to be issued and delivered to the recipient in order to allow for a refund of any VAT overcharged on the supply of the eligible equipment during the relevant period. If the recipient cannot be identified, the supplier is to report, and remit collected VAT amounts to the tax authority.

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Although some penalties for violations related to VAT in UAE are becoming less severe, there’s still a very alarming array of VAT enforcement powers that can trap unwary registered businesses. Through proper awareness of all the problem areas, as well as careful planning, it’s possible to avoid being an unwitting victim.

Filing of Tax Returns for VAT-Registered Businesses

The following violations and penalties are applicable for VAT-registered businesses in UAE:

• Failure of a business or its legal representative in filing VAT return within the timeframe specified by the FTA – the penalty is going to be charged onto the company’s legal representative. Penalty is at AED 1,000 for the first offense and AED 2,000 for a repeated offense within twenty-four months from committing the first offense.
• Failure of a VAT-registered business to submit VAT return before the deadline as specified by the VAT legislation – penalty of AED 1,000 will be imposed for the first offense and AED 2,000 for a repetitive case in the next twenty-four months following the first offense.
• Failure in paying VAT stated in a tax assessment or tax return form before the deadline that is specified by the VAT legislation – a taxable person will be incurring a penalty for late payment. Two percent of the tax that’s unpaid will be due to the FTA by the business immediately. Four percent will be due a week following deadline of tax payment. One percent will be the penalty for every day VAT is left unpaid a calendar month following the VAT payment deadline. The maximum penalty for late payment of VAT is three hundred percent.
• Submission of erroneous tax returns – penalty is fixed which is at AED 3,000 for the first offense. For any repeated offense, it will come with an AED 5,000 penalty. There will also be a percentage-based penalty imposed on a business aside from the fixed penalty. Fifty percent of the amount that’s unpaid will be the penalty if the VAT-registered business doesn’t make a VAT voluntary disclosure or a business has made a voluntary disclosure only after it is being notified and the FTA has already started the audit process. Thirty percent of the amount unpaid to the authority will be the penalty if the VAT-registered business discloses the error voluntarily following the notification sent by the FTA for a tax audit and the tax audit hasn’t started yet. Five percent of the amount unpaid to the tax authority is the penalty if the business makes a disclosure voluntarily prior to being sent a notification of a tax audit by UAE tax authorities.

Late registration

The Federal Tax Authority (FTA) must be notified of your liability in undergoing VAT registration when your taxable turnover exceeds the mandatory registration threshold for the past twelve months. The mandatory registration threshold in UAE is AED 375,000. If you believe you’ll be exceeding the threshold soon, you may begin the registration process.

When notification regarding VAT registration in UAE is late and you’ve failed to notify the tax authority, you’ll be charged regardless of the reason or excuse you have for the delay. A penalty of AED 20,000 will be imposed onto your business.

Take note: the penalty may be mitigated at the discretion of the FTA with levels of mitigation greatly dependent on the unique circumstances of every single case.

Following the registration for VAT in UAE

Every business in UAE that is registered for VAT needs to make sure that it’s organized in dealing with taxation on-time and correctly:

• Is there someone within the organization who controls the VAT accounting and make sure new offerings are dealt with properly for the purpose of VAT?
• Is your business system capable of ensuring all input tax and output tax are recorded properly?
• Is there a system in place that can make sure proper evidence can be obtained in supporting claims for VAT input tax?
• Where VAT isn’t charged for supplies made, would there be proper evidence retained and is it correct in law?
• Is there a system in force that can make sure input tax that’s non-deductible isn’t reclaimed including most VAT for business entertaining, motor cars or exempt supplies?
• Are VAT charges always considered prior to contracts being made?

Appeals

Appeals against penalties, assessments, and amount of interest that’s charged by the FTA may be made by a VAT-registered business or its legal representative. The first appeal will be local and independent done by the FTA. The FTA has powers of mitigation for appropriate circumstances. When an appeal is against an imposition of penalties or interest, tax must be paid prior to an appeal being heard. This is unless a business is capable of demonstrating the fact that it’s unable to pay due to financial hardship.

Source : GCC FinTax

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One of the first updates to the UAE VAT Executive Regulations since they were published towards the end of 2017 relates to the zero-rating of exported services. This change in 2020 only involved changing the word ‘or’ to ‘and’ but caused a profound shock in the UAE market for exported services and left a lot of questions open. Given the lack of clarity regarding the update, the FTA subsequently published a VAT Public Clarification on the zero-rating of export of services (“VTP019”) to provide its opinion on the impact of the change.

Legislative Change

Prior to the change, Article 31(2) of the Executive Regulations read:

‘For the purpose of paragraph (a) of Clause 1 of this Article, a Person shall be considered as being “outside the State” if they only have a short-term presence in the State of less than a month or the presence is not effectively connected with the supply.’ [Emphasis added]

Following the change in law, this article read as follows:

‘For the purpose of paragraph (a) of Clause 1 of this Article, a Person shall be considered as being “outside the State” if they only have a short-term presence in the State of less than a month and the presence is not effectively connected with the supply.’ [Emphasis added]

Impact of Change

Prima facie this change appeared to significantly restrict the zero-rating, meaning that if an employee or director of a business entered the UAE for a period exceeding a month, all supplies to that business by UAE suppliers would be subject to VAT. Furthermore, where an employee or director came to the UAE for less than a month, but this was even tangentially connected with the supply, the supply would also be subject to VAT. Finally, and potentially most concerningly, the change in law appeared to mean that businesses with branches in the UAE could never benefit from zero-rating, even where this branch had nothing to do with the supply concerned.

Clearly this would have significantly widened the scope of tax and would have caused significant difficulties for suppliers in monitoring staff movements for all their customers.

FTA Clarification

Once the uncertainty among exporting businesses became clear, the FTA released VTP019 to clarify its position on the meaning of the change, in which the FTA considered the place of residence of the recipient of exported services.

A recipient of services is regarded as having a place of residence in the UAE if they have either a place of establishment or fixed establishment in the UAE. Where a recipient has establishments in multiple jurisdictions, the establishment most closely related to the supply of services must be determined and it is this establishment that will drive the VAT treatment.

UAE suppliers are only entitled to apply the zero rate of VAT on services supplied to customers without a UAE place of residence under the above rules.

The Public Clarification sets out the FTA’s interpretation of the criteria to consider in determining the establishment most closely related to the supply, where there is uncertainty regarding whether a supply of services is received by a foreign or UAE establishment of a recipient. These include the following:

• Which establishment is the contractual recipient of the supply;
• Which establishment is actually benefiting from the supply;
• Which establishment will receive the invoice and make payment for the supply;
• Which establishment provides instructions to the supplier; and
• Whether the services are related to business being carried on by the recipient through an establishment in a particular country.

Furthermore, the FTA stated that only the physical presence of the recipient during the period of supply and consumption needs to be considered; the location of the recipient before and after performance and consumption of the services should not be taken into account for the purposes of residency in relation to the supply.

Importantly, VATP019 states that when determining the location of the recipient, only the establishment most closely related to the supply should be considered. This means that if a recipient has both UAE and non-UAE establishments, and the non-UAE establishment is most closely related to the supply, the condition that the recipient is outside the UAE may still be met, despite the recipient having a UAE establishment.

Continued Uncertainty

While the FTA Clarification provided some welcome clarity in relation pre/post-supply visits to the UAE, as well as in relation to UAE branches and visits exceeding a month not effectively connected to the supply, there are still uncertainties despite the clarification.

For example, the FTA confirmed that a non-UAE recipient of services (including one which already has a UAE establishment) could potentially no longer be considered ‘outside the UAE’ if employees or directors come to the UAE during the period in which the services are performed, and this visit relates to the supply being made.

The problem in this case is that there is no de minimis limit and no concept of scale. For example, a director coming to the UAE for one day for an annual management meeting or in order to sign a contract for the supply could potentially prevent zero-rating. This would be a harsh interpretation of the law but based on currently available information is perfectly possible.

In summary, UAE businesses involved in the export of services should continue to be careful, especially where customer staff are likely to visit the UAE, as certain seemingly insignificant trips could inadvertently cause previously zero-rated supplies to become standard-rated. Where there is any doubt, professional advice or a private clarification from the FTA should be sought.

Source : GCC FinTax

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Invoicing being a key function of every business and e-invoicing is a norm related to it, it is super critical for businesses to understand the concept of e-invoicing and the preparedness that allow you to adapt to the new system of issuing of invoices.

e-invoicing is a process through which business to business (B2B) transactions are authenticated with a unique number known as IRN and QR code by the invoice registration portal (IRP). Read What is e-Invoice in GST? to know more.

What e-invoicing requires?

In the e-invoice system, as a supplier, the moment you create an invoice for your customer, it should be uploaded to IRP where the validation will be done, and IRN along with the QR code will be issued. Next, you need to print the invoice with QR code before issuing it to your buyer.

How is current practice different from e-invoicing?

There is a drastic change if you compare the new norm with the current practice which doesn’t require you to authenticate the invoice. In current practice, as a supplier, you print the invoices, issue it to the buyer and then periodically report the details in GSTR 1. Post that, the buyer gets the visibility of invoices in GSTR -2A.

The other mandate that comes with e-invoicing is that an invoice is valid only if the invoice is authenticated by IRP and the QR code (which is embedded with an IRN) is printed on the invoice. In another way, any invoice without QR code that is authenticated by IRP will remain invalid. This implies that the buyer will be eligible for input tax credit only on the invoices that are authenticated by the IRP portal.

The change and the technology

The new mandate requires you to upload the e-invoice details in prescribed format (JSON) to IRP. Next, download the output file (JSON) that is authenticated by IRP with IRN and QR code. Later, you need to print QR code and IRN on the invoices before issuing it to the buyer.

As a result, the current practice of invoicing will change. First, businesses need to make a provision for real-time upload of invoice data and printing of QR code. This will emphasize the necessity of businesses to have a right technology which assists in real-time and instant generation of e-invoices without need to change the invoicing process.

Secondly, the business behaviour is expected to change where the buyer will drive the supplier to upload the invoices to the government system to confirm his eligible ITC. Therefore, it is evident that buyers will appreciate doing business with the suppliers who recognise the importance of quick and accurate upload of invoices.

Businesses who are using software that directly integrates with the IRP portal will find it easy to manage the e-invoicing requirements. Because the direct integration helps you automatically upload the e-invoice data to the portal and instantly print the QR code into the invoices. This way, you can continue the invoicing process as always without the need to change.

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Introduction to VAT Registration in UAE

Being registered under the VAT law means that a business is acknowledged by the government, as a supplier of Goods and Services and is authorized to collect VAT from customers and remit the same to the government. Only VAT registered businesses will be allowed to do the following:

• Charge VAT on taxable supply of goods and services
• Claim Input Tax Credit on VAT paid on their purchases, which will be deducted from VAT liability on sales
• Payment of VAT to the government
• Periodic filing of VAT return

Apart from the above, all registered businesses have to align their business reporting structure in line with the compliance requirements such as accurate and updated books of accounts, tax paid documents such as Tax invoice, credit notes, debit notes, records to all inward supplies and outward supplies etc. are required to be maintained.

Therefore, understanding the fundamentals of VAT will be one of the important steps for your VAT preparation and obtaining VAT registration will be the first step towards transiting your businesses to the VAT era.

Who should register under VAT?

Are all businesses liable to register under VAT? No, only those businesses crossing the defined annual aggregate turnover threshold are liable to register under VAT. Based on the registration threshold, a business will either be mandated to register or as an option, a business can apply for registration or can seek exemption from VAT registration

On this basis, VAT registration in UAE can be classified into the following:

• Mandatory VAT Registration
• Voluntary VAT Registration
• Exemption from VAT Registration

VAT registration Deadlines in UAE

As a move towards implementation of VAT in UAE on 1st January 2018, the Federal Tax Authority (FTA) is inviting applications for VAT registration. The FTA has opened its portal to allow the businesses to register online. The early call for online registration allows the businesses to be prepared well in advance and be ready to charge VAT from 1st January 2018. The UAE VAT registration in the FTA portal is carried out in a phased manner depending on the turnover of the business.

VAT Turnover Calculation for Registration in UAE

In UAE VAT, businesses whose annual turnover exceeds the mandatory registration threshold of AED 375,000 and the voluntary registration threshold of AED 187,500 are allowed to apply for VAT registration. Therefore, it is crucial for businesses to understand what type of supplies are considered in deriving the annual supplies turnover and how to calculate the VAT turnover for registration in UAE.

How to Apply for VAT Registration in UAE

In UAE, the businesses whose turnover exceeds AED 375,000 have to mandatorily apply for VAT registration. To facilitate the businesses to register, the Federal Tax Authority (FTA) has opened its portal for online VAT registration. The deadlines based on the turnover of businesses are already announced by FTA and the registration will be carried out in a phased manner. While it is crucial for businesses to determine their obligation towards VAT registration, it is also important for businesses to know how to apply for VAT Registration and understand the level of details required to complete the online registration process.

This is because, before applying or starting the online VAT registration process, having a good understanding about the type of details required and steps to complete the online VAT registration will help you to prepare well in advance. As a result, the registration process can be completed easily and can avoid unnecessary delays due to furnishing of incorrect details which could even lead to rejection of registration application.

• Creation of e-Service Account
• Login to your e-Service Account
• VAT Registration Form: The online VAT registration form contains 8 sections as shown below, in under which the details need to be furnished for completing VAT registration
  • About the applicant
  • Details of the applicant
  • Contact details
  • Banking details
  • Business relationships
  • About the VAT registration
  • Declaration
  • Review & submit

VAT Group Registration

In UAE VAT, any person conducting business is not allowed to have more than one Tax Registration Number (TRN), unless otherwise prescribed in the UAE Executive Regulation. Thus, even if you are operating via branches in more than one Emirate, only one VAT registration is required. With a similar objective, if two or more persons are related or associated parties in the businesses, they are allowed to apply for VAT group registration.

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