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A Simple Guide to Registering Your New Company for VAT in UAE

Starting a new company in the United Arab Emirates (UAE) is an exciting venture, but it comes with certain responsibilities, including Value Added Tax (VAT) registration. VAT is a tax applied to the sale of specific goods and services in the UAE, and new businesses must register with the Federal Tax Authority (FTA) to comply with the law. In this easy-to-understand guide, we’ll walk you through the step-by-step process of registering your new company for VAT in UAE.

1. Determine Your Eligibility

Before diving into the VAT registration process, ensuring that your new business meets the eligibility criteria is essential. Currently, the registration threshold is an annual turnover of AED 375,000. If your projected annual revenue exceeds this limit, VAT registration in UAE is mandatory. However, you can register voluntarily if your turnover falls below this threshold.

2. Gather Necessary Information

You’ll need specific information and documents related to your new business to complete the VAT registration application. Here’s what you’ll need:

  • Business License: Your company’s Trade License.
  • Company Documents: Information about the company’s articles and memorandum of association.
  • Contact Information: Accurate details of your company’s location and phone numbers.
  • UAE Bank Account: Information about your company’s bank account in the UAE.
  • Financial Data: Details about projected expenses and anticipated yearly revenue.

Consider consulting UAE tax experts to clarify document requirements and additional registration necessities further.

3. Create an E-Services Account

To initiate the VAT registration, you must create an account on the FTA’s e-Services portal (https://eservices.tax.gov.ae). You must provide your email address and create a secure password during registration.

4. Complete the VAT Registration Form

After successfully creating your e-Services account, log in to the portal. Navigate to the VAT registration section and fill out the online application form with accurate information about your new business as required by the FTA.

5. Consider Appointing a Tax Agent

Hiring a tax agent can be beneficial, especially if your business operations are complex. Tax agents can help prepare and submit your application, ensuring that all VAT in UAE criteria are met. If you decide to hire a tax agent, you must provide their information in the registration application.

6. Wait for FTA Approval

Once you’ve submitted your VAT registration application, the FTA will review the provided information. The processing time may vary, but you can typically expect a response within a few days to weeks. If additional information or clarifications are needed, the FTA may contact you.

7. Obtain the Tax Registration Number (TRN)

Upon approval of your VAT registration application, the FTA will issue a Tax Registration Number (TRN) specific to your new business. This TRN will serve as your identifier for all interactions with the FTA and transactions involving VAT in UAE.

8. Start Charging and Collecting VAT

With your TRN in hand, your new business must begin charging VAT in UAE at the standard rate of 5% on taxable supplies of goods and services. Make sure to inform your clients that your business is now a registered VAT entity and include the VAT amount on your invoices.

9. Ensure Compliance with VAT Reporting and Rules

You must adhere to the FTA’s reporting requirements as a VAT-registered business. While the filing frequency may vary based on your company’s sales and operations, VAT returns are typically submitted quarterly. To facilitate seamless VAT reporting, maintain precise records of all business transactions, including sales, purchases, and VAT collected.

10. Understanding Service Fees and Time Estimates

Registering your new company for VAT in the UAE is typically free of charge, and the process takes approximately 45 minutes. However, it’s crucial to determine your eligibility before applying. If you voluntarily register and do not meet the mandatory threshold, you must still follow the FTA’s rules and regulations, including record-keeping and tax invoice issuance.

The FTA estimates a processing time of 20 business days from the date they receive a completed application. If additional information is required, the processing time may be extended. It’s essential to update your application and promptly provide any requested information. Failure to do so may result in your application being denied.

Summing It Up

In conclusion, registering your new company for VAT in UAE is straightforward, but it requires careful attention to detail and compliance with FTA regulations. If you have any doubts or concerns, consider seeking the expert services of UAE VAT Registration. We are experienced tax consultants who are well-versed in the latest VAT laws. We can guide you through registration, ensuring your new business complies with UAE tax regulations. Contact our tax expert team for assistance, and embark on your VAT registration journey with confidence.