VAT Registration in UAE
VAT Registration in UAE
VAT (Value Added Tax) was introduced in the UAE under Federal Decree-Law No. 8 of 2017, effective 1 January 2018. VAT is applied at a standard rate of 5% on most goods and services. Businesses exceeding the mandatory turnover threshold must register with the Federal Tax Authority (FTA).
VAT Registration Threshold
- Mandatory Registration: Annual taxable turnover above AED 375,000
- Voluntary Registration: Annual taxable turnover above AED 187,500
Upon successful registration, the company receives a Tax Registration Number (TRN), which is required for VAT return filing and refund claims.
Maintaining accurate accounting records is mandatory to ensure compliance and proper tax reporting.
Documents Required for VAT Registration
VAT registration is completed through the FTA online portal. The following documents are typically required:
- Trade License
- Certificate of Incorporation
- Memorandum of Association / Partnership Agreement
- Passport and Emirates ID of Manager/Owner
- Company contact details
- Office tenancy contract
- Contact Details
- Bank account details
- Profile of the Manager
Also Submit the following declarations:
- Business activity profile
- Customs registration details (if applicable)
- Turnover details for the last 12 months (with supporting documents)
- Expected turnover for the next 30 days
- Import/export details
- GCC business activity details
Proper documentation is essential, as the registration process involves detailed financial disclosures.
Applying for VAT Registration is a slightly complex and lengthy process. You must be ready with all your personal and business identification documents and the respective scanned copies before you begin the registration process. For any assistance on VAT Registration or VAT Return Filing, feel free to reach out to our VAT Consultants. B2B Group of Consultants provides end-to-end assistance for VAT registration and TRN issuance in the UAE.
Identification of Designated Zones
Certain conditions must be satisfied for a Free Zone to be treated as a Designated Zone and considered outside the UAE for VAT purposes.
The Designated Zone must be a clearly defined and fenced geographic area.
Security systems and Customs controls must be in place to monitor the movement of individuals and goods entering and exiting the zone.
The zone must maintain proper internal procedures for storing, processing, and tracking goods within the Free Zone.
The operator of the Designated Zone must comply with the procedures and regulations issued by the Federal Tax Authority (FTA).
For assistance with VAT registration in Free Zones, our team can guide you through the applicable regulations and procedures.
VAT Registration for Free Zone Companies in UAE
Although Free Zones are separate jurisdictions for business setup, they are not automatically outside the scope of UAE VAT.
Only those Free Zones specified under a UAE Cabinet Decision qualify for special VAT treatment. These approved Free Zones are referred to as Designated Zones for VAT purposes.
For businesses operating within Designated Zones, certain supplies of goods may be treated as outside the scope of UAE VAT, provided strict conditions and documentation requirements are met. However, supplies of services remain subject to standard UAE VAT regulations. Proper compliance and record keeping are essential to maintain VAT eligibility within these zones.
VAT Registration for Offshore Companies in UAE
There is often confusion regarding whether International Business Companies (IBCs), commonly known as Offshore Companies, fall under UAE VAT regulations. The UAE has offshore jurisdictions such as Ajman Offshore, RAKICC, and JAFZA Offshore. Offshore companies are legally treated as non-resident entities and are not permitted to conduct business within the UAE market.
An offshore company cannot lease its own office premises and must operate through a registered agent’s address. It is also not eligible to register with the Chamber of Commerce or obtain an Import Export Code.
Since offshore companies do not conduct taxable activities within the UAE, they are generally not subject to UAE VAT. However, VAT is applicable on service fees charged by the registered agent for incorporation and annual maintenance.
At B2B Group of Consultants, our VAT specialists provide structured advisory services in line with UAE VAT Law and FTA regulations. We assist businesses with VAT registration, obtaining a Tax Registration Number (TRN), preparing tax invoices, and filing quarterly VAT returns in compliance with regulatory requirements.
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VAT De-Registration in UAE
VAT De-Registration refers to the cancellation of VAT registration with the Federal Tax Authority. Businesses may need to apply for de-registration when they no longer meet VAT registration requirements or cease taxable activities.
Companies must ensure that their reasons for cancellation align with UAE VAT laws. Invalid applications or delays in cancellation may result in penalties imposed by the FTA. Applications for VAT de-registration are submitted through the FTA online portal, and specific procedural steps must be followed as per the VAT Decree-Law.
When to Apply for VAT De-Registration
- If the company’s annual turnover does not exceed AED 187,500 within 12 months after VAT registration
- If the business stops making taxable supplies
- If taxable expenses fall below the mandatory VAT registration threshold of AED 375,000
- After 12 months from the date of voluntary VAT registration
- Upon company liquidation or de-registration
The VAT de-registration application must be submitted within 20 working days from the occurrence of the relevant event. In the case of voluntary registration, there is no fixed deadline; however, unnecessary delay may lead to penalties.
Documents Required for VAT De-Registration
- Company liquidation letter (if applicable)
- Audited financial statements for the last 12 months
- Confirmation that taxable turnover is below threshold
Clearances Required for VAT De-Registration Approval
Before approval of VAT de-registration, the business must clear all outstanding VAT liabilities, file pending VAT returns, and settle any administrative penalties with the Federal Tax Authority.
VAT de-registration is as important as VAT registration for businesses operating in the UAE. Proper compliance ensures avoidance of penalties and smooth closure of tax obligations.
For professional guidance on VAT de-registration and compliance procedures, consult our VAT experts today.
B2B Group of Consultants provides professional support for VAT registration, return filing, compliance review, and VAT de-registration in the UAE, ensuring adherence to Federal Tax Authority regulations.