VAT registration

What is value added tax?

Value Added Tax is a tax imposed on goods and services sold and provided in the United Arab Emirates. This tax is one of the most common taxes worldwide.

VAT operates on the principle that it is imposed at every stage of manufacturing, production or distribution until the product is sold or the service is provided to the end customer (known as Tax Point). In other words, the tax is charged on the difference between the price paid by the final consumer and the actual cost of the production or service.

VAT is collected by companies from customers and deposited to the federal authorities. Tax revenues are often used to finance national projects and improve public services such as health, education, infrastructure, and others.

To register for VAT in the UAE, companies and individuals who exceed the mandatory registration threshold (AED 375,000 per year) must register in the tax system with the UAE Tax Authority.

To complete the registration process, some information and documents must be available such as personal data, identity number, passport number, address of the company’s headquarters, in addition to some other required documents.

Documents required for VAT registration:

It will be necessary for you to prepare the following information in an appropriate format and include it in your online application:
• Valid trade licence(s)
• Passport/Emirates ID of the authorized signatory(s)
• Proof of authorization for the authorized signatory(s)
• Contact information
• Bank letter validating the bank account details of the applicant
Depending on the basis on which you are registering, other relevant documents may include:
• For taxable supplies (applicable for all legal types except Federal and Emirate Government)
o Audit report audited or non-audited financial statement.
o Self-prepared calculation sheet which may include details to calculate the taxable/zero-rated supplies based on financial records
o Revenue forecast with evidence (e.g., Local Purchase Order or Contract)
o Monthly turnover declaration for the specified periods that is signed and stamped by the authorized signatory on the entity’s printed letterhead
o Supporting financial documents (e.g., invoices/LPOs/contracts/title deed/tenancy contracts)
• For taxable expenses (applicable for all legal types except Federal and Emirate Government)
o Audit report, audited or non-audited financial statement
o Expense budget report
• Articles of Association/Partnership Agreement (if applicable)
• Certificate of Incorporation (if applicable for Legal Person)
• Documents which show ownership information of the business
• Customs details (if applicable)
• Power of Attorney documents (if applicable)
• Club, charity or association registration documents and supporting evidence (applicable if you selected “Legal person – Club, Charity or Association”)
• A copy of the Decree (applicable if you selected “Legal person – Federal UAE Government Entity” or “Legal person – Emirate UAE Government Entity”)
• Other relevant documents such as documents providing information about your organization, including its activities and size (applicable if you selected “Legal person – Other”)
• A scanned copy of the Emirates ID and passport of the manager, owner and senior management
• A scanned copy of the land/property title deed (applicable if you selected “Legal Person – Incorporate/Legal Person – Club or Association/Legal Person – Charity/Legal Person – Federal UAE Government Entity/Legal person – Emirate UAE Government Entity/Natural Person”)
Accepted file types are PDF, JPG, PNG and JPEG. The individual file size limit is 5MB.
Required Forms:
Below are the templates that you may need to complete and upload as part of your online application:
• Taxable supplies – Turnover declaration template
• Taxable expenses – Turnover declaration template
• Turnover declaration letter form

What are the tax obligations for new companies?

Newly incorporated companies whose annual sales are expected to reach the mandatory registration threshold must register with the Federal Tax Authority (FTA) within 30 days from the date of company incorporation. After registration, they have to file tax returns and pay the taxes on each quarter (every three months) . They must also comply with the imposed tax requirements and provide the required documents and reports upon request.

What can be the consequences of not complying with tax registration ?

In the event of failure to register for value-added tax in the UAE when the company or individual is required to register, this is a violation of the tax laws, and it will result in penalties.

The UAE Federal Tax and Authority may impose fines on registrants who are late in registering or who violate tax laws, including administrative penalties and financial fines.

The UAE Federal Tax Authority can also take legal action against those who fail to register and pay tax, such as seizing assets, goods or real estate, or obtaining court orders to seize assets.

In addition, a lawsuit may be filed against those who fail to comply with the tax, and the financial and legal penalties range according to the details of the case, so it is necessary to ensure compliance with registration and tax payment under the applicable tax laws in the UAE.

What does Tax Max for Taxes Consulting provide tax to its clients?

Tax Max is an approved tax company authorized from the Federal Tax Authority to provide advisory services and prepare tax returns for taxpayers, and deal with the Federal Tax Authority representative.

Companies and individuals benefit from our services for many reasons, such as reducing costs of time and effort involved by complying with tax requirements, obtaining professional tax consulting, and avoiding all tax issues and the penalties related to it, as we provide a letter of guarantee indicating our full responsibility for the type of service provided.