VAT Registration in UAE: Documents & Information Required
With the changes in the system, the United Arab Emirates has now implemented the Value Added Tax (VAT). That has made it crucial for every company to get VAT Registration so they can pay accurate taxes. You pay VAT at a rate of 5% on goods and services. However, there are some exceptions, such as healthcare, simple food items, and education. You can have a look at the guidelines and governing implications on VAT via the official website. That allows you to understand the process of registration and also assists you in calculating the tax amount.
However, if you need some help with the registration process, contacting a professional company will be the best decision. A trusted agency will make the process of VAT Registration in the UAE much easier. Also, with their help, you can understand the updated guidelines and ensure you pay the correct amount depending on all the latest protocols. It will ensure there are no mistakes during the tax calculation and prevent hefty fines. If you want to know about the documents and VAT registration process, we have listed all the essential information in this article.
Who Should Register for VAT?
The new amendments mandate the companies to register for VAT if they have an annual turnover of more than AED 375000/-. Thus, all individuals and companies should register for VAT if their annual turnover is more than the set amount.
This threshold is the same for all individuals and companies. The companies operating before the implementation of this law must go through with the VAT Registration. New companies, on the other hand, must take care of the registration when establishing the company.
The VAT is an indirect tax added to goods and services that a company provides to its customers. This tax applies to both companies and individuals. Once the company or individual has registered, they need to submit a return to the FTA (Federal Tax Authority). It is submitted periodically on a monthly or quarterly basis. The company or individual pays all the tax collected. The VAT implemented in UAE is similar to VAT in Europe, you can acquaint yourself with the process from other countries too.
The final consumer pays the VAT. You can any amount claim back any amount that you pay. However, not all services are part of the VAT system. Some services such as transport, finance commissions, school fees, and interests are exempt. In addition to all these exemptions, Free zone companies are not always an exception. Some companies that have a turnover above the threshold are mandated to go through VAT Registration. Companies that are manufacturing supplies for foreign companies can apply for an exemption.
Thus, you will need to read up on all the guidelines before you register for VAT. The information makes the registration process simple and allows you to expand your business as well. Before you go through the VAT registration process, you will need a ton of documents. All of these documents are fundamental for the registration process. Thus, you should keep soft copies of all these documents. When you are filling out the application, you will be required to upload copies of all documents for verification. We have listed out all the essential documents below, have a look to be prepared.
Documents Required For VAT Registration
You will require soft copies of all these documents while filling the application. All of these documents are essential during the registration process.
- Documents help identify the authorized signature like a copy of passport, Emirates ID.
- Company’s or individual’s turnover for the last 12 months in AED.
- A copy of the trade license of the company.
- Description of all business activities.
- Details of the bank account.
- A range of supporting documents for 12-months sales.
- If applicable, you will also need all supporting documents for customs registration in each Emirate.
- Expected turnover of the company in next 30 days.
- You will need to share information if you are expecting to deal with GCC customers or suppliers.
- All the other official documents that authorize the entity to conduct activities within the UAE. These documents include Articles of Association, power attorney, certificate of incorporation, etc.
- The estimated value of both exports and imports for one year to every GCC country.
Companies can also register voluntarily if they want to go through the VAT registration. Companies that have a turnover of more than 187,000 AED can register voluntarily for VAT.
VAT registration requires a lot of work and effort. You will need to be aware of all the guidelines to ensure you follow the process correctly. If you think you need some help with the process, you should enlist the help of a professional company. HALSCA is a professional accounting firm that can help you with VAT registration in UAE. They employ a range of professional accountants who can make the process easier for you. Browse their website to learn more about their services, or contact their exceptional team at +971 55 651 9937.