What Activities Are Subject To VAT In The UAE– Registering for VAT
3rd November,2019 / Haroon Juma / VAT & Tax Blogs
VAT Registration in UAE
As a business or individual receiving commercial consideration, VAT registration is mandatory if your taxable supplies exceed AED375,000 in the next 30 days.
For many businesses, registering for VAT often leads to frustration and delay. It is a common misconception issuance of a TRN is a straight forward process.
The VAT system is evolving. The FTA will adapt the Tax system from empirical data and market experience. Consequently, due processes will also change to reflect these considerations.
Understanding VAT Registration in the UAE
To get a better understanding of VAT registration, here are some important considerations to note.
During the first year of VAT, it was evident that many companies and individuals operating in the UAE registered for VAT, others waited and some (especially individuals or directors) were unclear how they should comply.
Before January and in Q1 2018, registering for VAT was relatively easy and fast. Business applications were subject to self-declaration statements and received a Tax Registration Number (TRN).
This complied with the FTA strategy to bring into the system as many eligible tax payers for the introduction of VAT.
The emphasis is now on applicants to provide demonstrable and sufficient evidence to meet the registration requirements in securing a TRN.
This entails significantly more understanding and preparation to ensure the application progresses smoothly and is finalised as promptly as possible.
Prolonged applications due to a lack of preparation cause avoidable delays with negative consequences, especially if the taxable periods are retrospectively set.
Experience and understanding of FTA processes and requirements are essential to avoid issues and unforeseen consequences.
From our experience, the most common issues for delays or rejections include:
- Lack of planning and preparation. Have you planned the application before exceeding the threshold. Have you made sure that you have collated all the required documentation?
- Inability to prepare a clear basis for registration. If you are asked, have you prepared the transactional summary to present the calculation for taxable supplies? Do you have a clear understanding of a taxable supply?
- Lack of details in supporting the basis of your registration. Do you have all the required documents required to submit your submission?
- Lack of understanding of FTA requirements and processes. Have you read and understood the FTA guides and processes?
- Changing FTA policies. Is this your first time or did you register another company sometime back? If so, it is likely you may not be updated with the current protocols and will be unprepared.
VAT Registration Support
If your business is unsure and inexperienced with the FTA requirements and regulations, it is highly recommended that you secure support.
As a registered tax agency we are often requested to resolve submission issues resulting from one or all of the issues listed above.
Many requests could have been resolved with assistance at the outset of the process to build a credible basis for the submission.
Starting with professional support will save time and frustration, ensuring full compliance with the FTA.
Simply Solved is an ISO 9001 & 27001 certified company and a registered FTA Tax Agency. Our a team of experienced consultants and tax agents provide high-quality, cost-effective services including VAT registration for companies of all sizes.
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We support our clients with defined processes, platforms and expertise to deliver advisory, project and outsourced services in Accounting, Tax, Auditing, HRM, IT & Marketing. Our offerings are specially designed to meet the UAE Regulations to put you in control of your information, comply to the regulations and help you make better business decisions.