The UAE Resident businesses make taxable supplies in the country are required to register for VAT if the value of their taxable supplies and imports in the last 12 months has exceeded or is expected to exceed the mandatory registration threshold of AED 375,000 within the next 30 days or Businesses operating in the UAE can choose to register for VAT. if the total value of their taxable supplies and imports, or taxable expenses/purchases in the past 12 months has exceeded or is expected to exceed the voluntary registration threshold of AED187,500 within the next 30 days.
Non-UAE-resident businesses that make taxable supplies in the UAE must also register for VAT, regardless of the value of their taxable supplies and imports, if there is no other person obligated to pay the due tax on these supplies in the UAE.
Types of VAT registration
There are two types,
- Voluntary VAT Registration
- Mandatory VAT Registration
Voluntary VAT Registration
A business can apply for VAT registration if it doesn’t meet the mandatory registration criteria and if either of the following conditions are met:
- The total value of its taxable supplies and imports or taxable expenses/purchases in the previous 12 months exceeds the voluntary registration threshold.
- The business expects that the total value of its taxable supplies and imports or taxable expenses/purchases will exceed the voluntary registration threshold in the next 30 days.
The voluntary registration threshold is AED 187,500.
Mandatory Registration
A business must register if:
- The total value of its taxable supplies and imports exceeds the mandatory registration threshold over the previous 12 months, or
- The business anticipates that the total value of its taxable supplies and imports will exceed the mandatory registration threshold in the next 30 days.
The mandatory registration threshold is AED 375,000.
Required Documents for VAT registration
- Valid trade license(s)
- Certificate of Incorporation
- Articles of Association / Memorandum of association
- Owner passport and emirates ID copy.
- Passport/Emirates ID of the authorized signatory(s)
- Proof of authorization for the authorized signatory(s)(Power of attorney or Moa)
- Contact information (Active email Id and Mobile number)
- Bank letter validating the bank account details of the company
- Customs details (if applicable)
- Ejari copy
Points to be noted after VAT Registration
Keep your records
Tax records should be maintained for a minimum of five years, depending on your business type, to prevent potential fines. The FTA may ask you to retain the records for an additional period of up to 4 years in specific cases, as determined in the FTP Executive Regulations.
Tax Registrants Must Keep the Following Records
- All supplies and imports of goods and services
- All tax invoices, credit notes, and alternative documents received
- All tax invoices, credit notes, and alternative documents issued
- Records of goods and services that have been disposed of or used for non-business activities, including VAT amounts paid on such goods and services
- Records of goods and services for which input tax was not deducted
- Records of exported goods and services
- Records of adjustments or corrections made to accounts or tax invoices
- Inventory records
You must also keep VAT records or accounts that include any of the following:
- Payable output tax on taxable supplies
- Payable output tax on taxable supplies, calculated using the Reverse Charge Mechanism
- Payable output tax after making corrections or adjustments
- Recoverable input tax on supplies or imports
- Recoverable input tax after corrections or adjustments
You must keep accounting records, commercial books and all documents related to your business activities. These documents and records include:
- Balance sheet, Statement of Profit or Loss, and Other Comprehensive Income
- Records of salaries and wages
- Records of fixed asset
- All inventory records and records of inventory checks (including quantities and values) at the end of any Tax Period
SUBMIT YOUR TAX RETURNS ON TIME
The Federal Tax Authority (FTA) typically sets a three-month tax period, but it has the flexibility to adjust the duration as needed. Taxpayers are required to submit their tax returns by the 28th day following the end of each tax period, or the next working day if the 28th falls on a weekend or holiday. Failure to meet this deadline may result in specific penalties imposed by the FTA.
Monthly VAT returns
VAT return filing will be monthly for businesses with an annual turnover of AED150 million or more.
Why Choose Spectrum Auditing?
At Spectrum Auditing, we go beyond just being an auditing firm; we’re your trusted partner in navigating the ever-evolving landscape of UAE regulations. Here’s what sets us apart:
- Unparalleled Expertise: Our team consists of accredited auditors, management accountants, consultants with in-depth knowledge of UAE laws, ensuring your business remains compliant.
- Streamlined Solutions: We take a comprehensive approach, guiding you through every step of the process, from risk assessment to filing reports.
- International Recognition: Be audits or any type of compliance, we adhere to the highest standards (ISA, IAS, IFRS), providing global credibility.
- Personalized Support: We understand every business is unique. We tailor our services to address your specific needs and answer any questions you may have.
Partner with Spectrum Auditing today. Let’s focus on your success, while you focus on what you do best – running your business.
Contact us today for a consultation at +971 4 2699329 or email [email protected] to get all our queries addressed.
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