Registration for VAT with UAE Federal Tax Authority

Before the declaration of Tax Procedures, there has been extended researches and studies on the part of the government, making assured that everything will be relatively easy for everyone in the country.

History of Tax System in UAE:

Since the milestone Federal Law Number 7 of 2017 regarding Tax Systems was announced by Sheikh Khalifa Bin Zayed Al Nahyan in June of the year 2017, it laid down the bases of the tax policies that would soon be administered in the United Arab Emirates starting 1 January 2018. This will mark the United Arab Emirates and Saudi Arabia as the first countries that are part of the Gulf Cooperation Council that will implement Value added tax.

Arriving mid of September, the start of the registration will happen for all firms that fall under the minimum annual revenue of AED 375,000. There are approximately 350,000 businesses that are expected to register under this new regime.

Registration of VAT: UAE Federal Tax Authority

The registration will be done on the Federal Tax Authority website. The well-established and economically sound companies will be first-in-line in the registration along with those companies that are producing and importing goods that will have the excise tax on—tobacco, energy drinks, and carbonated drinks.

Implementation of VAT:

There have been a lot of questions originating from the business world regarding the implementation of the VAT registration in Dubai, and the Ministry of Finance’s website has been updating its VAT page for recent information to satisfy the inquiries of UAE citizens.

The federal tax authority has started an online system on an official website that will be providing a facility for businesses that exceed compulsory and voluntary value-added tax registration thresholds.

Business means it is basically involved and ongoing in any form of the following such as industrial, commercial, professional, trade, etc.

VAT Returns/ Filling of VAT:

Value-added tax revenues must be filed by the business within 28 days from the close of the tax period (according to the methods identified clearly in the value-added tax legislation) with the federal tax authority on a regular basis—this still depends on the FTA’s decision; it can be quarterly or for a shorter time. Moreover, there will be e-services online that will be given by the government, and tax returns shall be filed there.

Moreover, a business can select to register for value-added tax regardless if they do not meet the minimum annual revenue, but they go exceeding the voluntary basis that is AED 187,500. 

Additionally, on the other hand, if the minimum amount for voluntary registration is surpassed by a business’s expenditures, they can register voluntarily as well. New organizations (which are beginning to develop and without turnovers) are encouraged in this kind of opportunity, enabling them to register for value-added tax.

Taxable supplies:

To understand further, if you are bound to be registered, the definition is as follows. If there is a supply of products or services that are done in the United Arab Emirates and have the probability of being taxed at either 5 percent or 0 percent, this is a taxable supply. Even imports are taken into concern as taxable supplies if they are made in the United Arab Emirates.