Value Added Tax (VAT) is a consumption-based tax applied to goods and services at each stage of the supply chain. The UAE introduced VAT on January 1, 2018, at a standard rate of 5%.
Businesses with an annual turnover of AED 375,000 or more are required to register for VAT. However, companies registered for VAT in an FTA (Free Trade Agreement) partner country may also apply for VAT registration in the UAE.
FTA VAT registration is a streamlined process that allows businesses to claim VAT refunds on goods and services purchased within the UAE. This process is available to companies established in an FTA partner country that do not have a physical presence in the UAE. Meanwhile, businesses operating within the UAE can still claim VAT refunds on their purchases by following the standard VAT refund procedure.
1. Create an Account on the FTA Website
The first step is to create an account on the Federal Tax Authority (FTA) website. Businesses must provide basic details such as:
- Company name
- Email address
- Contact number
2. Submit the Required Documents
Once the account is created, businesses must submit the necessary documents to complete the registration. The required documents may vary depending on the company’s country of establishment and business nature.
3. Await Approval
After submitting the documents, businesses must wait for approval from the FTA. Once the application is approved, the company will receive a confirmation notification, finalizing its FTA VAT registration in Dubai.
Value Added Tax (VAT) is a consumption-based tax applied to goods and services at each stage of the supply chain. The UAE introduced VAT on January 1, 2018, at a standard rate of 5%.
Value Added Tax (VAT) is a consumption-based tax applied to goods and services at each stage of the supply chain. The UAE introduced VAT on January 1, 2018, at a standard rate of 5%.
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Introduction to VAT Registration in the UAE
VAT registration in the UAE is mandatory for businesses and individuals whose taxable imports and supplies exceed AED 375,000 annually. However, if the total taxable turnover in the past 12 months or the expected turnover in the next 30 days is below AED 187,500, VAT registration is not required.
Businesses that exclusively deal with VAT-exempt supplies may also apply for an exemption from VAT registration.
Understanding VAT Compliance
Once registered, businesses and VAT certificate holders in Dubai, UAE, must comply with reporting requirements set by the Federal Tax Authority (FTA). This includes:
✅ Maintaining accurate and updated financial records
✅ Recording all external supplies and inward supplies
✅ Keeping track of tax-paid documents such as tax invoices, credit notes, and debit notes
Preparing for VAT Registration
Understanding VAT fundamentals is crucial for businesses transitioning into the VAT system. Proper VAT registration ensures compliance with tax laws and smooth business operations in the UAE’s regulated market.
Who Needs to Register for VAT in the UAE?
Not all businesses are required to register for VAT. Only those that meet the specified annual turnover threshold are eligible for VAT registration. Based on the registration criteria, businesses in the UAE fall into the following categories:
1️⃣ Mandatory VAT Registration
2️⃣ Voluntary VAT Registration
3️⃣ VAT Exemption Registration
1. Mandatory VAT Registration in the UAE
Businesses must register for VAT if:
✅ They have a physical presence in the UAE.
✅ Their taxable supplies exceed AED 375,000 in the past 12 months.
✅ They anticipate their taxable supplies will exceed AED 375,000 within the next 30 days.
In such cases, businesses must complete their VAT registration through the Federal Tax Authority (FTA) portal.
2. Voluntary VAT Registration in the UAE
Businesses that do not meet the mandatory VAT registration threshold can opt for voluntary registration if:
✅ Their taxable supplies or expenses exceed AED 187,500 in the past 12 months.
✅ They expect to exceed this threshold in the next 30 days.
🔹 Voluntary VAT Registration for Startups
Startups with zero turnover can also apply for voluntary VAT registration if they incur significant taxable expenses in the early stages of their business. This allows them to claim VAT refunds on their initial costs.
3. VAT Exemption Registration in the UAE
Businesses are not required to register for VAT if:
❌ Their taxable supplies fall below the voluntary threshold of AED 187,500.
❌ They deal exclusively in zero-rated supplies (such as exports or specific essential goods).
Such businesses may apply for VAT exemption from registration through the FTA.
How to Apply for VAT Registration in the UAE?
Applying for VAT registration in Dubai involves two main steps:
1️⃣ Creating an Electronic Service Account
2️⃣ Completing the VAT Registration Process
Step 1: Create an Electronic Service Account
Before proceeding with VAT registration, businesses must create an electronic service account on the Federal Tax Authority (FTA) portal. This process is similar to setting up an online account (e.g., Gmail or Yahoo).
🔹 Steps to Create an e-Services Account:
✅ Visit the FTA e-Services portal at https://eservices.tax.gov.ae
✅ Click on “Register” at the top right corner of the page
✅ Provide necessary details such as email, business name, and contact number
✅ Verify your account via the confirmation email
Once your account is created, you can proceed with VAT registration.
Step 2: VAT Registration Process
The VAT registration process in the UAE requires businesses to:
✅ Log in to the FTA e-Services portal
✅ Complete the VAT application form by providing:
- Business details
- Bank account information
- Authorized signatory details
✅ Submit required documents, including: - Trade license
- Financial statements
- Ownership and identification documents
🔹 VAT Registration Criteria:
- Businesses exceeding AED 375,000 in taxable supplies must register for VAT.
- Businesses with taxable supplies over AED 187,500 can opt for voluntary VAT registration.
Upon successful submission, the FTA reviews the application and issues a Tax Registration Number (TRN) upon approval.
VAT Group Registration in the UAE
What is VAT Group Registration?
VAT Group Registration allows two or more businesses operating in the UAE to register as a single taxable entity under one Tax Registration Number (TRN). This is particularly beneficial for companies within a corporate group, as it simplifies VAT compliance and reporting. Businesses must meet specific criteria outlined in the UAE VAT Law to qualify for group registration.
Eligibility Criteria for VAT Group Registration
To apply for VAT Group Registration in the UAE, businesses must meet the following conditions:
1️⃣ Business Presence in the UAE
Each applicant must have a legally registered office or a fixed business establishment in the UAE. This includes:
✔️ Place of Establishment: The official legal address where business decisions are made and managed.
✔️ Fixed Place of Business: A physical location where business activities are conducted, with the necessary infrastructure and workforce to support operations.
2️⃣ Related Parties Requirement
All businesses in the VAT group must be economically, financially, or legally connected. A “related party” is defined as an entity that shares ownership, voting rights, or control over another company.
3️⃣ Control by One or More Persons
A single entity or a group of individuals must control the businesses applying for VAT Group Registration. Examples include:
✔️ Common shareholders or stakeholders
✔️ Directors or senior managers managing multiple entities
✔️ Business partners with significant control over financial decisions
Benefits of VAT Group Registration
🔹 Single TRN for All Entities: All companies in the VAT group will be assigned a single Tax Registration Number (TRN), reducing administrative complexity.
🔹 Simplified VAT Compliance: VAT returns and reports will be submitted at the group level instead of each individual entity.
🔹 VAT-Free Transactions Within the Group: No VAT will be applied to transactions between entities within the VAT group. However, transactions with businesses outside the VAT group remain subject to VAT.
VAT Group Registration Process in the UAE
Step 1: Log in to Your e-Services Account
✔️ Visit the FTA e-Services Portal
✔️ Click on “Register for VAT” from the dashboard
Step 2: Review the VAT Registration Guide
✔️ A “Getting Started Guide” will appear, providing essential information on VAT registration
✔️ Read the guide carefully, check the confirmation box, and click “Continue”
Step 3: Fill Out the VAT Registration Form
The online VAT registration form consists of eight sections, requiring details such as:
✔️ Applicant Information
✔️ Business Details
✔️ Contact Information
✔️ Banking Details
✔️ Business Relationships
✔️ Declaration & Final Submission
✔️ Fields marked with a red asterisk (*) are mandatory. If any required fields are incomplete, the system will prompt you to provide the missing details before proceeding.
