Services

VAT / TRN Registration

The UAE government implemented value added tax (VAT) in the country from January 1, 2018 at a standard rate of 5%, the Federal Tax Authority (FTA) is inviting applications for VAT registration. The purpose of VAT is to raise revenue to finance government spending like any other tax. VAT registration is the process of listing your business with the government as active in production and sales. Under the UAE VAT, it is mandatory for every business to describe a Tax registration number (TRN) in order to claim credits of taxes paid. The said TRN can be communicated by a business to its suppliers, vendors, and customers – so that when they raise an invoice, it is tagged with a TRN –allowing businesses to claim credits.



Criteria for registering for VAT in UAE including :


  •  A business must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum.
  •  It is optional for businesses whose supplies and imports exceed AED 187,500 per annum.
  •  A business house pays the government, the tax that it collects from its customers. At the same time, it receives a refund from the government on tax that it has paid to its suppliers.



UAE VAT-registered businesses must:


  • Charge the appropriate amount of VAT on their taxable goods/services through a tax invoice.
  • Maintain business records to enable the government or auditor to check if things are in order.
  • Report the VAT charged, and the VAT paid to the government, on a regular basis.


Tax Registration Number(TRN)


Under the UAE VAT Law, it is mandatory for every business to describe a Tax registration number (TRN) in order to claim credits of taxes paid. The said TRN can be communicated by a business to its suppliers, vendors, and customers – so that when they raise an invoice, it is tagged with a TRN – allowing businesses to claim credits.
Businesses that registered before 4th December 2017 got their TRN to help achieve tax compliance ahead of VAT implementation on 1st January 2018, the FTA started to issue provisional TRNs to businesses that commenced registration after the 4th December deadline – so that there is no interruption in business.
If you have been given provisional approval for VAT registration (as can be checked on one’s email communication), then you will not be able to access your VAT registration certificate at the moment. It will be available at a later date, once the review and verification of your registration details are completed by the FTA. You will receive a communication once your VAT registration certificate is available to you.
TRN is a pre-requisite to VAT implementation in the UAE, and hence the issuance of provisional TRNs would go a long way in ensuring continuity of business.


How to register for VAT in UAE?


Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. The rate of VAT is 5 per cent. VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.VAT registration is the process of listing your business with the government as active in production and sales. After a business registers for VAT, it's able to reclaim any VAT paid on company purchases and becomes responsible for: Charging VAT on any goods or services sold (and charging the right amount!).Companies can register on the online portal of the FTA website. Businesses are required to set up an online account on the site and fill up the VAT registration form. For a detailed guide on how to go about VAT registration, you can go through the VAT Registration User Guide published by the FTA.
Seeing as VAT would come into effect in the UAE from 1 January 2018, businesses operating there would need to carry out their VAT implementation plans. This includes systems for VAT filing or reclaiming, as may be applicable. This would have nominal to considerable impact on top lines and balance sheets, thus requiring companies to plan out appropriate financial, technical, compliance and training systems in order to be in accordance with the new regime.

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