VAT

VAT registration in Dubai, UAE

We help businesses to ensure an error-free and on-time VAT Registration.

VAT

VAT was introduced in the United Arab Emirates on 1 January 2018. The general VAT rate is 5% and applies to most goods and services, with some goods and services subject to a 0% rate or an exemption from VAT (eg. Education services, Health Services, Charity etc.). VAT is a type of an indirect tax that is applicable on all the consumption of goods or services imposed at the time of sale. In UAE, a VAT registered business firm collects VAT on behalf UAE Federal Tax Authority (FTA).

Under the Federal Decree-Law No. (8) of 2017 on Value Added Tax, the Federal Tax Authority (FTA) categorised VAT into the three segments: the 5% standard rate, exempt and zero-rated.

5% STANDARD RATE

The standard rate of 5% VAT in the UAE applies to entertainment, electronics, hotel services, food and beverages, utility bills, private transport services, school uniforms, commercial rent, cars, jewellery and other sectors. Suppliers that produce goods and services within these categories have to register with the FTA and submit a VAT return to the authority at the end of each tax period. This is mandatory for businesses with taxable supplies and imports that exceed AED 375,000 per year. Those with taxable supplies and imports of over AED 187,500 per annum can choose to register for VAT in UAE.

0% RATED SECTORS IN THE UAE

The zero-rated tax applies to VAT taxable supplies, but the rate of VAT applied is 0%. Suppliers that produce goods and services with zero-rated tax must register for a VAT account and file tax returns.

According to Article 45 of the Federal Decree-Law no. (8) of 2017, categories that qualify for zero-rated tax in the UAE include:

Preventive and basic healthcare services and related goods and services.
Educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by federal or local government.
Crude oil and natural gas.
Buildings converted from non-residential units to residential units through sale or lease.
Buildings specifically designed to be used by charities through sale or lease.
Residential buildings within three years of completion, either through sale or lease in whole or in part.
Investments in precious metals.
Aircraft or vessels designated for rescue and assistance by air or sea.
Goods and services related to the transfer of goods or passengers on land, air or sea.
Exports of goods and services outside the GCC.

VAT EXEMPT SECTORS

UAE’s VAT exemptions apply to supplies that have been declared as ‘exempt’ from additional taxation. Goods and services suppliers that fall under the VAT exempt categories need not register for VAT in the UAE or file tax returns. For example, rents in Dubai for residential units are included in real estate transactions that are exempt from VAT. Here is the complete list of VAT exempt items in the UAE:

Financial services, including life insurance and reinsurance of life insurance. This also includes financial services that are not conducted for an explicit fee, discount, commission, rebate or similar type of consideration.
Residential buildings, other than the residential buildings which are specifically zero-rated.
Bare land.
Local passenger transport.

Besides these categories, tourists are also exempted from paying VAT. According to the FTA, tourists are eligible to receive 85% of the total VAT amount paid when shopping at any stores located across the UAE.

VAT Registration in UAE

Every business firm needs to register for VAT in UAE under the Federal Decree Law No. (8) of 2017 on Value Added Tax.

VAT Registration can be classified into TWO;

Mandatory VAT Registration

A person/ a firm with an annual turnover of AED 375,000 or more in a year should mandatorily do his VAT Registration in UAE
A person who does not have a place of residence in the UAE and do business in the UAE should register for VAT irrespective of his turnover
Any person who expected to be exceeded his turnover of more than AED 375,000 in the next thirty days, should also register for VAT

Voluntary VAT Registration

A person can choose to do a VAT registration in UAE under the voluntary option for his sales for a previous 12 months period exceeding AED 187,500
A person who expected to be exceeded his sales of 187,500 in the next thirty days, should consider VAT Registration
A person whose expense are subjected to tax exceeds 187,500 for a period of the previous 12 months

Documents Required for VAT Registration Processes

Emirates ID or passport copy to prove the identity
Certificate of the incorporation of the company
Trade license copy
Certificate of articles of association of the company
Description of business activities
Certificate of power of attorney of the company
Supporting documents to show 12 months of sales
Turnover for the last 12 months in AED
Expected turnover in the next 30 days
The estimated value of exports and imports for one year to all GCC countries
Consent to deal with GCC suppliers or customers
Supporting documents for customs registration in the Emirates if eligible to apply
Details of bank account

How to do VAT Registration in UAE?

VAT registration in UAE for new companies should be done online. After the submission of the application, the FTA will review the details and documents which have been provided and approve the application if the requirements are met and will give a Tax Registration Number (TRN). When the registration processes are over, the Ministry of Finance will issue a VAT certificate which is an official confirmation from the authority that the business is registered under the VAT law.

Why should you choose MAATS for your VAT Registration in Dubai, UAE?

VAT registration in Dubai involves a set of procedures. External assistance from experienced professionals is preferable for VAT registration process. At MAATS our experts have trained to fast-track the process and will aid with proper guidance throughout the procedures. We will ensure all rules and guidelines are being followed by doing VAT registration for new companies in UAE. We offer personalised solutions and support to our clients in the VAT registration services at any emirate of UAE. We are well informed regarding the latest norms set by the Federal Tax Authority. We understand the importance and need for VAT Services for every business firm in UAE. You can consult us for various VAT services.