How To Register For VAT In UAE For New Company

Establishing a new business in the UAE is a complex process that requires compliance with various obligations, such as VAT registration. It applies when a business meets the required threshold. It is a requirement of the UAE Federal Tax Authority (FTA) for businesses to be registered for VAT. Value Added Tax (VAT) is mandatory when their taxable supplies and imports exceed the registration threshold.

What Is VAT Registration In The UAE?

VAT registration is the process by which a company registers with the Federal Tax Authority and obtains a Tax Registration Number. Once the company is registered, it has to comply with UAE VAT laws, including paying VAT where applicable, maintaining appropriate records, submitting VAT returns, and paying the VAT to the FTA.

Registration for VAT is done online via the FTA’s EmaraTax platform. The FTA currently states an estimated processing time of 20 business days from receipt of the completed application.

When Does A New Company Need To Register For VAT?

Businesses that are resident in the UAE must sign up to pay VAT if the amount of their supplies that are taxable supplies and imports

is over AED 375,000 over the past twelve months.
is expected to exceed AED 375,000 within the next 30 days.

The current threshold is AED 375,000—the VAT registration threshold for companies based in the UAE.

VAT Registration Thresholds At A Glance

Registration type:	Current threshold
Mandatory VAT registration	AED 375000
Voluntary VAT registration	AED 187500

It is essential to analyze taxable revenue carefully, as the requirement to register is based on taxable supplies and imports rather than the company’s total revenue.

How To Register For VAT In The UAE

New companies can follow these steps to apply for VAT registration.

Create an EmaraTax Account

Begin by registering and activating an FTA account through the EmaraTax platform. A company’s authorized representative may use this account to log in to FTA’s tax online services.

Create a Taxable Person Profile

After you log into EmaraTax, you can create a new taxable person profile for your business. Fill in the business details for registration precisely.

Access The Taxable Person Account

After the taxpayer profile is created, click the View option to access the Taxable Person Account.

Select VAT Registration

Out of the tax-related services available, choose the option to register in the section titled Value Added Tax (VAT).

Complete The VAT Application

Give the necessary information regarding the firm, which includes the company’s business operations, financial statements, taxable supply Contact details, as well as additional information required from the FTA.

Upload Supporting Documents

The FTA might require supporting documents in accordance with the legal structure and the application. They could include:

Valid trade licence
Certificate of incorporation
Memorandum of Association (MOA) when applicable.
Commercial registration certificate or other official registration document
Passports and Emirates ID copies of the owner as well as authorised signatories
Power of attorney, if appropriate
Invoices and contracts that support them or purchase orders, agreements, and other business documents
Customs information, if applicable

The FTA declares that requirements for document submission will vary based on the type of applicant, an individual or a legal entity, and on the particulars of the request.

Submit The Application

Be sure to review all the information before sending the VAT registration application. False or incorrect information could cause problems during the review process.

The FTA has stated that at present, completed VAT registration applications are generally handled within 20 business days.

What Happens After VAT Registration?

Once the FTA has approved the application, the business will be issued a Tax Registration Number (TRN), and the certificate of VAT registration will be available on the taxpayer’s account.

Once the registration is complete, the company should ensure that its billing and accounting processes are properly set up. Based on the nature of its business and business needs, it might be necessary to:

Charge VAT on taxable supplies
Issue compliant tax invoices
Keep VAT-related financial records
Input VAT and output VAT are tracked
Submit VAT returns
You must pay the VAT due to the FTA within the applicable timeframe.

The FTA states that VAT returns, as well as related payments, must be made within 28 days of the end of the relevant tax period.

Is VAT Registration Mandatory For Every New Company?

No. Just because you have established a company in the UAE does not mean it must be VAT-registered immediately.

A business that is resident in the UAE will generally be required to register for VAT if its taxable supplies and imports are greater than the threshold, or are likely to surpass, the amount of AED 375,000 during the relevant time. Companies below this amount may be eligible to register on their own once they reach a voluntary registration threshold of AED 187500.

Businesses should, however, be aware of their earnings from the very beginning instead of waiting until the threshold has been significantly exceeded.

How Long Does VAT Registration Take?

The online application can be completed quickly. The FTA is currently estimating around 45 minutes to submit the VAT registration form, provided the required documents and information are available.

The estimated time for the FTA to complete the review is 20 business days following the date of receipt of a completed application.

What Are The Benefits Of Registering For VAT?

VAT registration can help a company stay in compliance with UAE tax laws and establish the proper tax process at an early stage.

If a business is eligible, VAT registration may also help:

Effective registration and collection of VAT
Recovering eligible input VAT as long as it is subject to applicable regulations
Better financial record-keeping
Greater transparency in business transactions
Compliance with FTA requirements

What Happens If A Company Delays Mandatory VAT Registration?

When a company is obliged to register for VAT, it must file a registration application with the FTA by the deadline applicable to it. A person required to register for VAT must submit a registration application to the FTA within 30 days of becoming required to register.

An entity located in the UAE must not put off tax registration until it’s legally obligated to do so. If a company reaches the mandatory VAT registration threshold and fails to submit its VAT registration application within the specified deadline, it may be subject to a late-registration administrative penalty of AED 10,000, in accordance with the applicable UAE tax legislation.

Late VAT Registration Can Result In Penalties

Suppose a company is required to register for VAT and submit its registration form within the appropriate time frame. The delay in submitting the application could result in a tax penalty for late registration and further tax compliance issues.

Final Thoughts

Registration for VAT is a crucial legal requirement for any newly established UAE firm once it meets the registration requirements. EmaraTax is a platform and companies must create their own company documents and financial details before submitting the application.

If you are nearing the threshold for VAT registration and are unable to determine your taxable supplies and imports, reviewing it and gathering the necessary paperwork in advance will help simplify the registration process and avoid unnecessary compliance issues.