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Here’s All You Need to Know about VAT Registration in Dubai

Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. It has undoubtedly been the biggest tax reform for the country till date. The implementation of VAT has developed another source of steady income for the government. The funds collected via VAT are used for the development of infrastructure, public facilities and a better standard of living. It also aids the government in reducing its overdependence on oil as a source of revenue.

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So what are the requirements for VAT registration in Dubai that you need to be aware of? Let’s read on.

Criteria for Registering for VAT

  • If the value of taxable supplies and imports exceed AED 375,000 in the previous 12 months then a natural or legal person in business is required to register for VAT.
  • If your taxable turnover is less than AED 375,000 but more than AED 187,500 per annum then you can voluntarily register for VAT.
  • If you expect your taxable turnover to exceed AED 375,000 per annum in the next 30 days, you are obligated to register for VAT.

How to Register for VAT?

To register your business for VAT, all you have to do is visit www.tax.gov.ae. Select E-services and create your account to register your business. It normally takes only 15 to 20 minutes to complete the online registration process, provided all your documents are in place.

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What Documents Do I Need for VAT Registration in Dubai?

In order to register your business online for VAT, you would be needing the following documents:

  • Business or Trade License
  • Passport / Emirates ID (in case of UAE residents) of manager or owner
  • Passport / Emirates ID of the authorized signatory in case he/she is different from the manager.
  • Proof of authorised signatory (Eg. Articles of Association, Power of Attorney attested by a notary, etc.)
  • Statement showing the turnover in the last 12 months

Frequently Asked Questions and Answers on VAT

Are There Any Penalties For Non-Registration of VAT?

The administrative penalty for late registration for VAT for every taxable person is AED 20,000. A taxable person includes every legal person who is mandatorily required to register under VAT and exceeds the threshold.

Can I Form A Tax Group?

Related businesses that are commonly tied via economic, financial or regulatory aspects can register together as a tax group. However, all these businesses must exist in the UAE and should be under a common control. A ‘representative member’ can then file a consolidated VAT return that includes all the transactions of the members of the group. Furthermore, all members of the group will remain jointly and severally liable for the VAT debts.

How Does VAT Work?

Once you have completed your procedure for VAT registration in Dubai, you can start charging VAT on the supplies you make. You must also keep a track on the VAT incurred on purchases. You will be entitled to reclaim your input tax, provided you have all your invoices maintained properly.

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For any queries on VAT registration in Dubai feel free to get in touch with us.