The issue of tax registration is often quite intricate and challenging to address, particularly in the context of the contemporary environment that is rapidly changing, such as the UAE.
By 2024, there have been impressive advancements in the efficiency of the taxation system in the UAE where the companies are assisted to fully and effortlessly meet their legal obligations and consequently concentrate on their progress. In this article, you will find step-by-step guide on the tax registration application process in UAE so you know what you may need to be fully compliant.
Who needs to register for Tax?
As was mentioned, not all businesses that are active in the UAE are legally bound to register for VAT or Excise tax.
- Mandatory VAT Registration: Currently, a business is legally required to register for VAT if its organization or company has a taxable supply turnover of over AED 375000
- Voluntary VAT Registration: In the same regard, organizations that have registered a turnover of more than AED 187500 can voluntarily register for VAT which may be advantageous in claiming input VAT.
- Excise Tax Registration: According to the law every manufacturer, importer, or any person who stores excisable goods must register for Excise tax.
Procedure to Register for VAT in the UAE:
- Sign up for an e-services account on the FTA Portal and input simple data about your business which will include the trade license number, the company’s contact information, and banking details.
- Once you have created an e-services account, you can get to the VAT Registration form. You need to put in accurate and current information about business operations, sales, turnovers, and estimated taxable supplies and expenses.
- Along with the VAT Registration form, you need to support supporting documents including a Trade license, Passport copies of the business owner, Emirate ID copies, proof of business address, and audit reports.
- FTA will consider your application as soon as you do the above-mentioned tasks. If no issues are found, you will be issued the VAT Registration certificate along with a Tax Registration number. This process might take up to an average of 20 working days.
Procedure to Register for Excise Tax in the UAE:
- Like in the case of VAT registration, the first action towards Excise Tax Registration is signing up for an e-services account through the FTA website.
- In the Excise Tax Registration form, you need to input detailed information about business operations that are related to manufacture, import, or stockpiling of excisable goods.
- Provide necessary documents as mentioned in the VAT Registration procedure.
- After your application is successfully submitted and approved, an Excise Tax Registration certificate will be issued by FTA that is vital for legal compliance in the distribution and production of excisable goods that require this certification.
Post Registration Compliance
- VAT compliance – Ensure that all invoices including TRN and VAT amount are VAT compliant. Submit VAT returns through the FTA Portal. Make sure to make the payments keeping the deadline in mind.
- Excise Tax Compliance -Report daily, weekly, or monthly changes in stocks and values of excisable goods. File monthly excise Tax returns. Ensure timely payments to avoid penalties.
When can one be exempted from Tax registration?
If you do not show your motive to import or take excise goods for normal consumption within the Designated zone, you might get exempted from Tax Registration. ‘On a regular Basis’ which refers to the involvement in Excise goods concerning the Designated zone during a period of six months must be followed.
If you are exempted from Tax Registration, in any case, notify the authority within the next 20 days. The authority might register someone for Tax immediately from the date of non- compliance with the exemption conditions.
The Primary Benefits of timely Tax Registration
- Dodge the risk of being penalized or landing in some sort of legal problem.
- Enhance your company’s image using compliance demonstration as a tool.
- You can claim for the VAT charged on any goods purchased related to business.
Conclusion
To summarize, tax registration in the UAE is not an onerous exercise with the help of proper guidance. Failing to meet the requirements of the tax laws as well as remaining updated regarding the current tax laws is crucial for not only maintaining compliance but also in strategic planning to take advantage of the dynamics of conducting business in one of the most prosperous economies in the world. For personalized assistance, consider consulting with tax consultants, such as Outsourced Bookkeeping who can navigate the specifics of your industry and business model.
