Introduction to VAT Registration in the UAE

Value Added Tax (VAT) was introduced in the UAE on January 1, 2018, at a standard rate of 5% on taxable goods and services. Businesses meeting the required turnover threshold must register for VAT with the Federal Tax Authority (FTA) to comply with tax laws.

In this article, we will cover:

✔️ Who needs to register for VAT?
✔️ Types of VAT registration
✔️ Step-by-step VAT registration process
✔️ Documents required for VAT registration
✔️ Consequences of non-registration

1. Who Needs to Register for VAT in the UAE?

Businesses operating in the UAE must register for VAT based on their annual taxable turnover.

Mandatory VAT Registration

✅ Businesses must register for VAT if their annual taxable turnover exceeds AED 375,000.
✅ Registration is required for residents and non-residents conducting taxable activities in the UAE.

Voluntary VAT Registration

✅ Businesses can voluntarily register if their annual turnover exceeds AED 187,500 but is below AED 375,000.
✅ This is beneficial for startups and SMEs as they can reclaim input VAT on purchases.

VAT Registration for Non-Resident Businesses

✅ Non-resident businesses supplying taxable goods or services in the UAE must register for VAT, even if they do not meet the turnover threshold.

2. Types of VAT Registration

Businesses can choose from the following VAT registration types:

Type	Description
Mandatory Registration	Required for businesses exceeding AED 375,000 turnover.
Voluntary Registration	Optional for businesses with AED 187,500 – AED 375,000 turnover.
Group VAT Registration	Allows multiple entities under common ownership to register as a single VAT entity.
VAT Registration for Non-Residents	Required for foreign businesses supplying taxable goods/services in the UAE.

3. VAT Registration Process in the UAE

The VAT registration process is done online through the Federal Tax Authority (FTA) portal

Step-by-Step Process:.

🔹 Step 1: Create an FTA e-Services Account

Visit the FTA website and create an account.
Provide a valid email ID and phone number.

🔹 Step 2: Complete VAT Registration Application

Log in to the FTA portal and select VAT Registration.
Fill in business details, including trade license information and financial data.

🔹 Step 3: Upload Required Documents

Submit all necessary documents (see list below).

🔹 Step 4: Review and Submit Application

Double-check all details and submit the application.

🔹 Step 5: Receive TRN (Tax Registration Number)

Once approved, the FTA issues a Tax Registration Number (TRN) via email.

4. Documents Required for VAT Registration

Businesses must submit the following documents for VAT registration:

✅ Trade License (copy)
✅ Passport copy of business owner/partners
✅ Emirates ID of business owner/partners
✅ Certificate of Incorporation or Memorandum of Association (if applicable)
✅ Business address proof (Ejari, tenancy contract, or utility bill)
✅ Bank account details (IBAN, bank statement)
✅ Financial statements or turnover proof (audit report, sales invoices)
✅ Import/export details (if applicable)
✅ Customs registration number (if applicable)
✅ Details of associated businesses (if applying for VAT group registration)

5. Consequences of Not Registering for VAT

Failing to register for VAT when required can lead to severe penalties from the FTA.

Violation	Penalty
Failure to register for VAT	AED 10,000
Late VAT registration	Additional penalties may apply
Failure to issue VAT invoices	AED 5,000 per incorrect invoice

6. VAT Compliance After Registration

Once registered, businesses must:

✔️ Charge 5% VAT on taxable supplies
✔️ Issue VAT-compliant invoices
✔️ File VAT returns (quarterly or monthly) via the FTA portal
✔️ Maintain VAT records for at least 5 years
✔️ Pay VAT dues before the deadline to avoid fines

7. How Accuvat Chartered Accountants Can Help

VAT compliance is crucial for businesses in the UAE. Accuvat Chartered Accountants offers:

✔️ VAT Registration Assistance
✔️ VAT Return Filing & Compliance
✔️ VAT Advisory & Tax Planning
✔️ FTA Audit Support & Representation