VAT Registration Services in UAE
You may effortlessly comprehend and comply with the UAE’s Value Added Tax regulation with the assistance of our team of highly certified and experienced accountants. We will review your invoices, quotes, contracts, and purchase orders to see if your company qualifies for either mandatory registration or voluntary registration.
Hiring the professional services of our in-house accountants, who will handle the bookkeeping, reconciliation, financial reporting, payroll, VAT reports, and audit support for your business, can help you avoid having a full-time employee, which can drive up costs. Additionally, our staff creates quarterly VAT reports that assist in determining whether you owe or are eligible for a refund of VAT. VAT, often known as value-added tax, is a tax based on consumption. VAT is a tax that is levied on purchases of goods and services, as opposed to income taxes. It is included at every stage of the production and delivery of the product where the company has contributed value. On any purchase, the buyer typically pays it. The company is required to gather the VAT and send it to the government. Penalties or even criminal charges may result from failing to comply.
VAT in UAE
VAT Law in the UAE
The final consumer is the one who bears the expense of the VAT, which is assessed on the use or consumption of goods and services. At each stage of the supply chain, the UAE applies VAT at a rate of 5% on taxable supplies of goods or services on tax-registered firms. However, businesses handle the collection and accounting of VAT on the government’s behalf.
According to the Federal Decree-Law No. 8 of 2017 on VAT and the Cabinet Decision (52) of 2017 on the executive regulations of the Federal Decree-Law No. (8) of 2017 on VAT, business owners in the United Arab Emirates are required to register their enterprises under the VAT. Both tax-registered firms run on the UAE’s mainland and in free zones are subject to the VAT.
VAT Registration in Dubai
Businesses must register for VAT if their taxable imports and supplies are AED 375,000 (USD $1,000) or more. Businesses having taxable supply and imports between AED 187,500 and AED 375,000 are permitted to voluntarily apply for VAT registration under UAE law. Businesses do not need to register for VAT if their taxable supply and imports are less than AED 187,500, though. Although businesses can submit their applications for VAT registration online, for the smooth execution of the procedure, they should choose one of the effective VAT Consultancies in the UAE. Additionally, it should be emphasised that any name—whether it belongs to a firm, an owner, or a manager—must be entered in accurate Arabic alongside English.
Documents Required for VAT Registration in UAE
The following documents must be submitted when registering for VAT registration in the UAE:
- Copy of a business licence
- Copies of the partners and business owner's passports
- Copy of the owners' and partners' Emirates IDs
- Company's Memorandum of Association (MOA) and Articles of Association (AOA)
- Company information, including address
- Financial information
- The monthly income statement for the entire year of 2017 in FTA format.
- Type of business and activities carried out
- Next 30 days' anticipated turnover
- Registrar of Customs information (if applicable)
- Official signatories Emirates identification documents, such as a passport and a visa
Value Added Tax or VAT registration in the UAE can be confusing. Here’s a simplified breakdown to help you determine if it applies to your business:
Who needs VAT registration in the UAE?
Generally, if your business makes taxable supplies exceeding AED 375,000 per year, you must register for VAT. Taxable supplies include:
- Retail sales
- Commercial property rentals
- Hotel stays and restaurant meals
- Car rentals and sales
- Repair and maintenance services
You might not need VAT registration in the UAE if your business primarily deals with the following:
- Renting or selling residential properties
- Certain financial services outlined in VAT regulations
- Public transportation services
- Selling undeveloped land
These goods and services are subject to 0% VAT, meaning VAT isn’t added to the price:
- Healthcare services
- Educational services
- Medicines and medical equipment
- International transport and exports
- Investments in precious metals (gold, platinum, silver)
- The first sale of residential properties
- Natural gas and crude oil
If you’re unsure whether your business needs to register for VAT or the VAT implications of your specific goods or services, consulting a tax consultant in Dubai is highly recommended.
Other types of taxes in the UAE
Excise tax
This tax is an indirect tax for specific goods that are typically deemed harmful to the environment or human health. It applies to the following products:
- Energy drinks or any drink containing ingredients that provide physical and mental stimulation
- Carbonated drinks, including aerated beverages, except unflavoured aerated water.
- Liquids used in tools and devices
- Electronic smoking tools and devices
- Tobacco and all tobacco products
- Sweetened drinks
Tourist taxes
Hotel apartments, hotels, resorts, restaurants, and other similar establishments may charge the following taxes to their guests or customers:
- 10% tax on the room rate
- 10% municipality fees
- 10% service charge
- 6-10% City tax
- 6% tourism fee
- AED 7 to 20 Tourism Dirham Fee for Dubai hotels, depending on the hotel grade or category
Importance of tax consultancy services
At Virtue, we go beyond offering company formation in Dubai. We can also be your tax consultant in Dubai if you need advice on the tax payments your business must fulfil in the UAE.
Our tax consultant in Dubai can:
- Oversee and organise your company’s finances and ensure correct tax returns
- Save you time and effort in preparing tax returns and financial statements
- Keep you up-to-date with taxation policies
- Assist in renewing business licenses and permits
Schedule a call with our team to discuss your needs.
The FTA will examine the application after receiving all the supporting documentation. If all the requirements are satisfied, FTA will approve the application, and within two to three weeks, a Tax Registration Number (TRN) will be granted. As mentioned above, the registration procedure for the tax group begins with the registration of a single company before group details are added. The failure of the taxable person to register for VAT within 30 days can result in a penalty of AED 20,000.
VAT Consultancy Services offered by Virtue
Businesses must select the best company for VAT Consultancy services in Dubai, United Arab Emirates based on a variety of criteria, including the tax consultant’s experience and knowledge of finance, IT, operations, VAT computation, VAT refunds, and tax filing. A VAT consultant who is well-versed in all the latest technology developments in the industry can easily check reports, claim refunds, fill out forms, or manage other challenging VAT-related concerns.
Virtue has a skilled group of VAT advisors who are knowledgeable with local VAT accounting, VAT filing, VAT refunds, and all other VAT-related laws and regulations in the UAE. Virtue may provide assistance with any tax-related issues and can represent businesses in tax disputes with FTA.
