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As per the Federal Decree-Law No. (8) of 2017, VAT (Value Added Tax) is being implemented in the UAE from January 1st, 2017. The VAT is levied on all products & services at a standard rate of 5%, which is very low compared to other countries that have already implemented it.

Businesses with more than AED 375,000 annual turnover shall be mandatorily registered with Federal Tax Authority and businesses with more than AED 187,500 turnover can be voluntarily registered with FTA.

VAT Registration in UAE – Documents Required

VAT registration in UAE is done through the Federal Tax Authority (FTA) website. Once you register for VAT in the UAE you will get the tax registration number (TRN) for filing the tax returns and claim refunds if any.

Companies that meet the minimum annual turnover are required to register for VAT in UAE.

The business records have to be maintained all the time for the government authorities to check the tax liability. Also, for a reclaim of VAT paid on business-related goods or services.

The following documents have to be submitted in the portal while registering for VAT.

  1. Trade License
  2. Certificate of incorporation or registration certificate
  3. Article of association/ partnership agreement or any other document showing ownership information about the business
  4. Copy of Passport and Emirates ID of the manager
  5. Profile of the manager
  6. Physical office location of the business
  7. Contact details
  8. Bank account details
  9. List of other business directories/partners in the UAE in the last five years along with trade license copies

Declaration about:

  • Business Activities of the applicant
  • Actual or estimated financial transaction values
  • Turnover in the last 12 months with supporting documents
  • Details about expected turnover in the next 30 days
  • Details about expected exempt supplies
  • Details about Imports and exports
  • GCC activities of the business
  • Details about customs registration

Applying for VAT Registration is a slightly complex and lengthy process. You must be ready with all your personal and business identification documents and the respective scanned copies before you begin the registration process.

For any assistance on VAT Registration or VAT Return Filing, feel free to reach out to our VAT Consultants

VAT Registration for Freezone Companies in UAE

Freezones have been excluded from the territorial scope of the UAE. However, for VAT purpose that is not the case.

Only those Free Zones listed in a Cabinet Decision quality for special VAT treatment and that special VAT treatment has certain limitations. These nominated Free Zones are known as Designated Zones of VAT Purpose.

The effect for businesses operating in Designated Zones will be that many supplies of goods will be outside the scope of UAE VAT, subject to strict criteria and detailed record keeping. Supplies of services are subject to normal UAE VAT rules.

Identification of a Designated Zone in the UAE

There are several main criteria which must be met in order for a Designated Zone to be treated as outside the UAE for VAT purpose.

  1. The Designated Zone must be a specific fenced geographic area.
  2. The designate zone must have security measures and Customs controls in place to monitor the entry and exit of individuals and the movement of goods to and from the designated zones.
  3. The Designated zone must have internal procedures regarding the method of keeping, storing and processing of goods within the free zone.
  4. The operator of the Designated Zone must comply with procedures set out by the FTA.

For any assistance on VAT Registration in Freezone, feel free to reach out to us right away!

VAT Registration for Offshore Companies in UAE

There is a confusion whether the International Business Companies (IBC) popularly known as Offshore Companies in UAE are within the purview of VAT law in the UAE.

As everyone knows, there are three offshore jurisdictions in the UAE – Ajman Offshore, RAKICC & JAFZA Offshore.

“Offshore companies “, as the name indicates, are legally considered to be outside the country. Offshore companies are non-resident companies, with no eligibility to do any business within the country of incorporation.

They are not allowed to establish their own office, but their legal Office will be the office of Registered Agent through which the company is incorporated. Offshore companies cannot be registered with Chamber of Commerce and they cannot obtain Import Export Code.

Being a Non- resident company and not doing business within UAE, an Offshore company will not come under the purview of VAT in UAE. It’s also pertinent to note that VAT is payable on the fee charged by Registered Agent for incorporation and annual maintenance of the company.

At Aurion, we have expert VAT Consultants having good knowledge of VAT Law & Legislation published by the UAE Government, in order to assist Clients. We provide accurate and reliable VAT Consultancy services and help Clients to register for VAT & obtain unique TRN (Tax Registration Number). Businesses have to file VAT return every 3 months & Aurion provides guidance & support to make Tax Invoices & file return.

Please find below link to download VAT guidance

VAT De-Registration in the UAE

Termination of VAT or VAT De-registration in the UAE is when a business terminates its VAT Registration with the Federal Tax Authority (FTA). There are multiple reasons why a business chooses for termination of VAT or Closing the VAT transactions.

Businesses operating in the UAE must mandatorily cancel the VAT registration and the reasons must be adhering to guidelines defined by the VAT laws of UAE. Any non-valid conditions or reasons might disapprove of your cancellation and would attract fines for nonpayment of VAT.

VAT De-Registration in the UAE – Steps

VAT De-Registration in the UAE can be applied by companies in the UAE through the Federal Tax Authority (FTA) Online Platform.

However, as per the VAT Decree-Law. there are certain steps and things to know for a company that is applying for the VAT De-Registration.

When to Apply for VAT De-Registration in UAE

  • If Annual turnover of the Company has not exceeded AED 187,500 in the 12 months after registering with the FTA
  • If a business stops making taxable supplies
  • If the Company still deals with taxable supplies but for the past 1 year and the expenses were under the VAT registration threshold (AED 375,000)
  • 12 months have elapsed since the date of voluntary VAT Registration
  • Upon Liquidation/ De-registration of a Company

The Company must ensure that the VAT De-Registration application form is submitted within 20 working days from the date of any of the events above ( In case of Voluntary VAT Registration there is no limit on the days to apply for VAT De-Registration). Delaying the application for de-registration of VAT would attract fines from the FTA.

Documents required for Submitting the VAT De-Registration Application Form

  • Company liquidation letter from authorities if the company is closed.
  • Audited Financial statement (Signed & Stamped) for the last 12 months stating the taxable supplies are less than the threshold.

Clearances for the approval of the application for VAT De-Registration in the UAE

The business entity must ensure that they have obtained clearance from the Federal Tax Authority by paying all the outstanding taxes, VAT Returns, and Administrative Penalties.

For businesses in UAE, VAT De-Registration is as vital as it is to register for VAT. Businesses must be well equipped about the rules and processes for VAT Cancellation in the UAE as well as the administrative penalties incurred upon delaying the de-registration process.

To know more about VAT De-registration, talk to our VAT Experts right away!