What is VAT? Guide to VAT Registration in UAE

Whether your business operates in a local or an international market, VAT registration in UAE is crucial to make your business compliant with local laws and regulations. There are many benefits to being registered with the UAE tax authorities, including the ability to recover VAT on your expenses and the use of reverse charges on goods purchased outside the UAE. But if you are unsure whether VAT registration is necessary for your business, here are some reasons why it is.

Document provision:

Successful VAT registration in the UAE will take several steps. First, you should create a user account for the Federal Tax Authority. Your e-mail account must be verified within 24 hours of registering. If you do not receive the verification link within this time frame, you should try registering again. Once you have an account, you will be invited to log in. To complete the VAT registration process, you must confirm the email address.

Double taxation:

The UAE has implemented VAT, and businesses in the emirate are required to register for VAT. This tax is generally paid by customers when they make a purchase. Businesses must collect this tax and remit it to the government or risk criminal charges. Over 150 countries have implemented VAT, including the UAE. VAT applies to all purchases in the UAE, including those made online and in traditional stores. Companies need to register for VAT in the UAE to avoid double taxation and other complications.

Importance of filing a tax return:

When VAT registration is compulsory in the UAE, the company should file a tax return at least once a year. This tax document has various important requirements and should be filed on time. The company should also have a Federal Tax Authority account, which a regulated tax agent can create. Filing an e-return on time will keep the company in good standing with the tax authority.

The VAT return is generally paid quarterly or monthly and serves as a document that lists the tax that the business has paid. Filing this return ensures that the VAT laws are followed. The tax return also serves as a formal reporting and auditing tool for the FTA. Therefore, filing this return is essential if you wish to maintain good accounts with the authorities and conduct your business. The VAT return must be filed online, either by e-dirham or by over-the-counter bank payment.