• Threshold Determination

Businesses need to assess whether they meet the mandatory threshold for VAT registration. the mandatory threshold is annual turnover of AED 375,000. If the taxable supplies and imports of a UAE-based business exceed AED 375,000 per annum the business vat registration is mandatory.

• Access to Specialized Expertise

Accounting is a specialized field that requires a deep understanding of financial regulations and best practices. Outsourced accounting firms bring a wealth of expertise, often exceeding what an in-house team can provide. This ensures that your financial matters are handled by professionals who stay abreast of industry changes, reducing the risk of errors and enhancing overall financial accuracy.

• Voluntary Registration:

Businesses that do not meet the mandatory threshold can opt for voluntary registration if they believe it is beneficial for their operations. VAT is optional for businesses whose supplies and imports exceed AED 187,500 per annum.

• Online Registration

The registration process is done online through the FTA's official portal.

• Preparation of Documents

A copy of the business license
The company’s Memorandum of Association (MOA)
A copy of the Emirates ID held by the owner and partners
Details of the business and the bank account
The income statement for the previous 12 months
Copy of the company owner’s and partners’ passports
The structure of the business and the action plan

• VAT Group Registration

Related businesses may choose to apply for VAT group registration, allowing them to be treated as a single taxable entity.

• Appointment of a Tax Representative (if applicable)

Non-resident businesses may need to appoint a tax representative in the UAE for VAT purposes.

• Application Submission

Complete the online VAT registration form and submit it through the FTA portal.

• FTA Review

The FTA reviews the application, and additional documentation or information may be requested.

• Registration Certificate

Once approved, the FTA issues a VAT registration certificate. It is crucial to stay informed about any changes to VAT regulations and requirements in the UAE. For the most up-to-date and accurate information, businesses should refer to the official website of the Federal Tax Authority or seek guidance from tax professionals familiar with UAE tax laws.

• VAT penalties in the UAE

Businesses in the UAE must adhere to the provisions of the Federal Tax Authority (FTA) if they want to avoid any VAT fines or penalties. For example, if a company is late in registering VAT, it will be fined 10,000 UAE dirham. If the tax is not paid on time, it will result in a late VAT payment penalty. The penalties for late payment are as follows: a 2% penalty on the following day of the due date, a 4% penalty from the following month, and a maximum 300 percent penalty a calendar month later.