Since January 1, 2018, the UAE has implemented a value-added tax. It is a 5% indirect tax imposed on most goods and services supplied at each stage of the supply chain. The final consumer bears the cost of this tax. Companies calculate and collect taxes for the government.
Companies registered for tax purposes are:
- Obligated to impose value-added tax on its supplies of goods or services.
- Able to recover any value-added tax it paid on goods or services related to its business.
- It is obliged to maintain a set of commercial records that allow the government to verify the validity of its transactions.
Every company that owns a business registered in the value-added tax system must declare on a regular and periodic basis the value-added tax it charges, as well as the amount of value-added tax it paid to the government. This is done officially, through the website of the Federal Tax Authority.
Businesses that can register for VAT
Businesses must register for VAT if their taxable supplies and imports from abroad exceed the mandatory registration limit of AED 375,000. In addition, businesses can optionally register for VAT if their taxable supplies imported from abroad are less than the mandatory registration threshold, but exceed the optional registration threshold of 187,500 dirhams. Likewise, any business may register voluntarily if its expenses exceed the voluntary registration limit, and they can choose one of the value-added tax accounting offices to determine whether they can register or not.
How to register in VAT System in UAE
Every organization can register for VAT through the electronic services section on the Federal Tax Authority’s website.
Before starting the tax registration process, the institution must create an electronic account on the website in order to start the service.
For more information about registering in the tax system or applying it, you can contact “VAT Registration UAE”. They are the most prominent office specialized in the value-added tax registration service in the Emirates.
Registration A Tax Group
A tax group can be formed between two or more legal persons, provided that both legal persons are residents of the United Arab Emirates. Legal persons must be interconnected companies that meet specific control criteria.
In order to register a tax group, if the member representing VAT wants to register for the group in the normal way, he must first start using the registration form to issue VAT.
When submitting the application, the service applicant will have a temporary tax identification number (TIN) and needs this number in order to be able to follow up and complete the tax group registration application. A separate application must be completed to register the tax group. The tax registration number will not be issued until the tax group registration request is approved.
It takes 15 to 20 minutes to complete the electronic application process for VAT registration.
The service applicant will be provided with a tax registration number when his application is approved. This allows the user to submit his tax returns later and pay the resulting amounts electronically.
“VAT Registration UAE” provides a range of services related to value-added registration services. It also provides value-added tax consultations.