Here is how you can register VAT in Dubai

UAE is an investor-friendly country and the business setup here is quite easy especially in Dubai as compared to other countries of the region. However, all businesses having annual revenue of AED 375,000 or more have to submit their VAT registration applications online to Federal Tax Authority (FTA). That too within the one month of being required to register.

Every VAT firms in Dubai is required to record all their financial deals. You will require some documents for the VAT registration Dubai. Registration may vary depending on the nature of the business organization.

If a business is applying for a VAT certificate on an individual basis, the following documents will be required:

• A request letter with signature
• Residential permit
• A copy of valid passport

In case a business wants to register as an authority, the following documents will be needed:

• A decree copy
• Application letter with approved signatory
• Incorporation copy act

If a Dubai based business wants to register for VAT, the below-mentioned documents are mandatory

• A letter of application which is signed by company authorities
• A copy of the trade license
• Emirates ID

A statement showing last one year’s turnover is also mandatory for all categories.

Criteria for VAT registration

1. In case the taxable revenue of your company in the last 12 months is over 375,000 AED you need to register for VAT. No exceptions.
2. If your taxable supplies haven’t reached 375,000 AED but more than 187,500 AED per annum, you have the option to apply for the registration voluntarily.
3. If your taxable turnover is expected to go beyond 375,000 per annum, in the next month then your VAT registration is mandatory.

How to get registered for VAT?

To begin the process of VAT registration online, you will have to visit www.tax.gov.ae. Here you will have to click on the e-services to make a registration account of your business. The entire process may take up to 20 minutes to complete in case all your documents are ready.

Penalties

Dubai authorities also impose penalties on non-registration of VAT.

The administrative penalties for late VAT registration are 20,000 AED applicable on every taxable person. A taxable person includes every legal person who is required to register for VAT and their annual turnover exceeds the limit mentioned above.

VAT working

Now that you have gone through the entire procedure of VAT registration, you can start charging VAT on your products and services. You should also have an eye on VAT which is incurred on your purchases. This allows you to reclaim your input tax in case you have the invoices.