VAT Registration in UAE: When, Why and How?

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VAT Registration in UAE
When, Why and How?
Value Added Tax has been implemented in the UAE
last 1st January 2018. With this, businesses need
to consider whether they are required to register
for VAT purposes as non-compliance will result to
heavy fines and penalties. Its very important
for a business to know when, why, and how to
register for VAT in the UAE in order to avoid
such penalties and to ensure compliance with the
respective laws and regulations.
For more information, visit the website
www.amca.ae
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When to register for VAT in the UAE?
As per Article 13 of Federal Decree-Law No. (8)
of 2017 on Value Added Tax, every Person who has
a Place of Residence in the UAE is required to
register for VAT if

• The total value of its taxable supplies and
  imports exceeds the mandatory registration
  threshold amounting to AED 375,000 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.

It is very important to know when exactly you
must register for VAT since failure of the
Taxable Person to submit a registration
application within the timeframe specified in the
Tax Law has an administrative penalty amounting
to AED 20,000. Instead of appropriating this
amount to operating or investing activities of
the company, imagine the opportunities one
company has lost just because of late
registration for VAT.
A company can also opt to register for VAT even
though the mandatory threshold criteria has not
been met. A business may apply to register if

• The total value of its taxable supplies and
  imports or taxable expenses in the previous 12
  months exceeds the voluntary registration
  threshold of AED 187,500, or
• The business anticipates that the total value of
  its taxable supplies and imports or taxable
  expenses will exceed the voluntary registration
  threshold in the next 30 days.

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Why register for VAT in the UAE?
Its not just about avoiding the administrative
penalties. VAT registration also means

• Only VAT registered companies can reclaim the VAT
  that they have paid on goods and services bought
  from other businesses known as input tax. Because
  of this, there are some companies that can even
  ask for a monetary refund if their input tax is
  greater than the output tax, (which is the Value
  Added Tax that a company charge on its sales). If
  your company deals with export of goods/service,
  your normal position will be refundable.

• VAT registration (especially those in voluntary
  position), can make your company appear larger
  and more established. This can be particularly
  appealing to other VAT registered businesses and
  clients. Displaying of TRN in your websites and
  correspondences, may encourage larger firms to do
  business with your company.

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How to register for VAT in the UAE?
You can register online by creating an e-Services
account in the FTA Portal. You must prepare
various documentations to prove that you reached
the threshold and you have submitted the
application registration on time. Best thing to
do is contact an FTA approved tax agency to
assist you in applying for registration.
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