UAE VAT Guide 2023

UAE VAT Registration Guide For 2023

In the United Arab Emirates (UAE), VAT is a consumption tax that is levied on most goods and services sold in the country. If your business is based in the UAE or you are planning to start a business in the UAE, you may need to register for VAT if your taxable supplies and imports exceed a certain threshold.

To register for VAT in the UAE, you will need to follow these steps:

1. Determine if your business is eligible to register for VAT. In the UAE, businesses with a taxable turnover above AED 375,000 per year are required to register for VAT.

2. Prepare the necessary documents. To register for VAT, you will need to have the following documents:

   • Trade license

   • Emirates ID or passport of the business owner(s)

   • VAT registration application form

3. Submit the VAT registration application. You can submit your VAT registration application online through the Federal Tax Authority’s (FTA) e-Services portal or at an FTA customer happiness center.

4. Wait for approval. Once you have submitted your VAT registration application, the FTA will review your application and determine if you are eligible to register for VAT. If your application is approved, you will receive a VAT registration certificate.

5. Charge VAT on your sales. Once you have registered for VAT, you will need to start charging VAT on your sales at the applicable rate (currently 5%). You will also need to submit VAT returns to the FTA on a regular basis to report the VAT you have collected and any VAT you have paid on your purchases.

It’s important to note that VAT registration and compliance can be complex, and it is advisable to seek the guidance of a professional tax advisor to ensure that you are following UAE VAT regulations.

VAT De-Registration in UAE

In the United Arab Emirates (UAE), businesses that are registered for value-added tax (VAT) may de-register for VAT if they meet certain conditions. To de-register for VAT, a business must first inform the Federal Tax Authority (FTA) and then submit a de-registration application through the FTA’s e-services portal.

To be eligible for VAT de-registration, a business must meet the following conditions:

1. The business must not have any taxable supplies or imports in the past 12 months.

2. The business must not expect to have any taxable supplies or imports in the next 30 days.

3. The business must not have any outstanding tax liabilities or penalties.

If a business meets these conditions, it can apply for de-registration by completing the de-registration application form on the FTA’s e-services portal and submitting it along with any required supporting documents. The FTA will review the application and may request additional information or documentation before deciding on the de-registration.

If the de-registration is approved, the business will no longer be required to charge VAT on its supplies or pay VAT on its imports and will no longer be required to file VAT returns. However, the business may still be required to retain certain records for a period in case they are needed for audit or verification purposes.

VAT Return Filing in UAE

VAT Return filing is a process by which businesses report the amount of VAT they have charged on sales and the amount of VAT they have paid on purchases. VAT returns are typically filed on a regular basis, such as monthly or quarterly, depending on the rules of the country where the business is located.

In the United Arab Emirates (UAE), VAT is administered by the Federal Tax Authority (FTA). Businesses that are registered for VAT must file VAT returns with the FTA on a regular basis. VAT returns must be filed electronically through the FTA’s e-Services portal.

To file a VAT return in the UAE, businesses will need to:

1.    Gather all the necessary documentation, including invoices, receipts, and other records of sales and purchases made during the relevant period.

2.    Use this documentation to calculate the total amount of VAT that has been charged on sales and the total amount of VAT that has been paid on purchases.

3.    Log in to the FTA’s e-Services portal and navigate to the VAT return filing section.

4.    Enter the required information, including the total amount of VAT charged on sales and the total amount of VAT paid on purchases.

5.    Submit the VAT return.

It’s important to note that businesses must file their VAT returns by the deadline set by the FTA. If a business fails to file its VAT return on time, it may be subject to penalties and fines.