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VAT Registration in Dubai

VAT Registration in Dubai

The standard VAT rate in UAE is 5%, which is one of the lowest rates at the global level. Just like other countries, the UAE has also introduced exemptions for certain products and services. Our specialists can help you if you want to open a company in Dubai and register for VAT in UAE.

 Quick Facts  
  We offer VAT registration services Yes

Standard VAT rate

5%

Lower VAT rates 

Not available
Who needs VAT registration

Legal entities with taxable supplies and imports exceeding AED 375,000/Year

VAT for real estate transactions

5%

Exemptions available

0% VAT rate for exported goods outside GCC

Period for filing

28 Days

VAT returns support Yes
VAT refund  Yes
Local tax agent required Yes

Dubai VAT registration for a foreign company

One should note that for UAE resident companies, the imposed VAT registration threshold is set at AED 375,000, while the voluntary registration threshold is AED 187,500. On the other hand, there is no registration threshold for non-resident businesses making supplies on which the VAT is required to be imposed. Below we review some of the formalities required for Dubai VAT registration for a foreign company:

  • VAT registration in Dubai applies to both natural persons and legal persons with businesses in the UAE, even if there is no trade license obtained.
  • A tax representative with residence in the UAE is needed to be able to register for VAT payment in Dubai. We can represent our clients with a power of attorney.
  • Articles and Memorandum of Association, the company trade license, passport and/or national ID of the shareholders and details about the import and export activities (if any) are among the necessary documents and requirements for VAT registration in Dubai.
  • Information about the company’s bank account is also required.
  • Where appropriate, the income statement for the last 12 months will also be presented.
  • Some online forms with information about the company and its activities in Dubai will also be filled out.
  • The Federal Tax Authority (FTA) will then verify the legal documents and issue the VAT number and TRN (Tax Registration Number) Certificate.

We remind you of the support of our local agents for Dubai VAT registration for a foreign company in order to benefit from a quick and simple process. On the other hand, you can also ask for VAT registration in any other emirate of UAE.

Entrepreneurs from abroad who want to open a business in Dubai can collaborate with one of our local agents. They can take care of the formalities and documents, mentioning at the same time that the incorporation time is approximately three weeks, during which the required formalities will be respected.

The foreign investors can also be interested in immigration to Dubai after opening their business there. Our specialists have experience in this field and can take care of the required formalities and the relationship with the relevant authorities. AED 1 million is the minimum amount of investment in the real estate sector if you want to obtain residency through investments. We, therefore, invite you to discuss all aspects with our local agents.

VAT registration in Dubai for local companies

The government has made an important progress in clarifying and helping those who need to register for this tax in the Emirate. VAT registration in Dubai is optional for new companies, however, it can become mandatory under specific conditions. With respect to the local entities required to apply for VAT registration in Dubai, we mention:

  1. natural persons and companies making VAT-taxable supplies in Dubai can register voluntarily for VAT;
  2. natural persons and legal entities importing goods subject to the VAT in Dubai can also register optionally for VAT;
  3. companies importing goods exceeding AED 187,500 per year can choose to register for VAT;
  4. companies selling and/or importing goods and services exceeding AED 375,000 per year are required to register for this tax;

Dubai companies registered for VAT will impose and collect the tax from the final consumer and will pay it to the government.

What is VAT and how is imposed in Dubai?

The value added tax or VAT is an indirect tax applied to sold products and services, which is why it could be regarded as a consumption taxVAT is considered an indirect tax because it applies to the final consumer who purchases the product or the service where the VAT was applied. Companies selling goods or services are the ones that collect the tax and return it to the government. One of our local agents can explain in detail how is VAT registration in Dubai made, including VAT registration in any other emirate of UAE.

According to the Cabinet Decision No. 46 of 2020, a person is considered as being ”outside the state”, and thus falling under the 0% VAT rate for the export of services, if such persons only have a short-term presence in UAE, of less than 30 days.

VAT exemptions in UAE

The following goods and services benefit from a 0% VAT rate:

  • exports;
  • international transportation services;
  • aircraft and sea transportation services;
  • investments in precious materials;
  • the supply of residential properties;
  • education services;
  • healthcare services.

In order to collect the VAT, Dubai companies will be required to register with the tax authorities.

What are the requirements for VAT registration in UAE?

One of the most important requisites to meet when applying for a VAT number in Dubai is to have a tax identification number. This is obtained together with the certificate of incorporation and is issued by the Trade Register in Dubai. Based on the tax identification number, a company will be issued a VAT certificate.

There are several documents that need to be prepared when registering for VAT in Dubai. Among these are:

  • the company’s business license (copy after the trade or commercial license);
  • copies after the passport of the owner and other shareholders in the case of companies;
  • the Memorandum and Articles of Association of the company;
  • information about the representative of the company and contact information;
  • proof of the registered address of the company in the UAE;
  • information about the corporate bank account (IBAN included);
  • an income statement for the last 12 months (where available);
  • an estimation of the expected revenue, turnover, and expenses for the following 30 days after the VAT registration;
  • information about the import-export activities of the company (where applicable);
  • the company’s customs code and copy of the Dubai Custom Code Certificate (where available);
  • information about the Gulf Cooperation Council countries in which the company trades;
  • a detailed description of the company’s business experience for the last five years (where available);
  • information on whether the company will be part of a tax group;
  • copies after the identification papers with the necessary visas in the case of natural persons.

Even if VAT registration in UAE can be completed online through the Dubai Government’s online portal, due to the extensive list of documents to be filed and the requirement of creating an online account, the procedure can be rather difficult for business owners. Our specialistss can help with this procedure and also with company formation in Dubai.

You can read about VAT registration in Dubai in the scheme below:

Content of the VAT registration form

As mentioned above, there is a standard VAT registration form that you must fill in with some essential data, among which we list:

  • the name of the applicant, respectively of the representative of the company to be registered for VAT payment in Dubai;
  • business performed in Dubai;
  • contact details of the company and the representative of the firm;
  • details of the bank account used by the company;
  • information about the products and services offered in order to choose the required VAT category.

Once these sections are completed, review the information provided to ensure that everything is correct. Next is submission and approval, after which the tax authorities will check the documents. One of our company formation specialists in Dubai will be at your disposal with specialized help for completing the necessary documents for VAT registration in Dubai.

Other VAT requirements

Not all companies supplying goods and services must register for VAT, but only those registering incomes above AED 375,000/ year. Also, VAT registration is voluntary for companies with incomes below AED 187,500/ year. The main advantage of VAT registration is that companies can be refunded for the amount paid from the collection of the new tax following the submission of the tax returns. VAT returns will be filed electronically at the end of the taxable period or on a quarterly basis.

The taxable periods are:

  • monthly for companies with an annual income over AED 150 million;
  • quarterly for companies with an annual income below AED 150 million.

It should be noted that non-resident companies or individuals with economic activities in the UAE are also required to register for VAT here. All VAT invoices must be kept for a period of five years by all VAT taxpayers.

The registration process is simple and local companies can benefit from assistance from our accountants in Dubai when applying for a VAT number. Please talk to our local specialists for more details about the VAT registration in Dubai.

VAT accounting requirements

All companies registered for VAT in Dubai must comply with specific accounting procedures, among which file tax returns in a due period of time. This period is assigned by the tax authorities in Dubai.

Here are the main VAT accounting requirements:

  • Dubai companies have 28 days to file their VAT returns after the end of the tax period.
  • Failing to file these returns will attract fines between 10,000 and 50,000 AED.
  • Businesses with an annual turnover above 150 million AED are required to register for VAT.
  • Companies must impose a 5% VAT rate on most of the goods and services supplied in Dubai.

Those interested in opening a Dubai company and registering it for VAT can rely on our local agents.

Assistance for VAT registration in Dubai

Foreign investors seeking to register for VAT in Dubai are required to appoint a local representative and our consultants can act on their behalf when dealing with the authorities. We can also handle various accounting matters of their companies in Dubai or in any free zone. We can also assist in registering a business in any Dubai free zone.

The video below is an overview of the introduction of the VAT in Dubai:

How can you know if the VAT registration has been accepted?

The UAE, the VAT registration platform allows accessing the status of the application for the VAT registration in Dubai. If it is pending, it means that the form has been sent and received by FTA, and the authorities will check the information. The suspended status means that the VAT registration application has been suspended, but the TRN has been issued.

Rejected applications by the FTA often imply the lack of necessary documents and/or their non-compliant completion. But in order to avoid situations like the latter, we recommend you collaborate with our local agents with experience in this matter.

Business owners from abroad must understand the tax registration obligations in the UAE. Here, we refer to the taxable supply, such as the supply of goods and/or services completed by a business registered in the UAE that can be levied at a VAT rate of either 5% or 0%.

Penalties for late VAT registration

There are also cases in which the registration for the payment of VAT in Dubai is made after the set deadline. In such a situation, you should know that the tax authorities are entitled to impose penalties of approximately AED 10,000. But if you register in time to pay this tax, the company will receive a VAT certificate and can then start its activities.

The implementation of VAT in UAE

The UAE Government implements regulatory mechanisms and frameworks on a periodic basis, across Government departments and realms, as part of its key initiatives to boost economic health. One such significant implementation was the introduction of VAT (value added tax) in the UAE.

In 2018, the value added tax (VAT) was implemented in the GCC (Gulf Cooperation Council), with key economies like the Kingdom of Saudi Arabia and the United Arab Emirates adopting and implementing the regulatory framework. For the general public, this meant higher payouts for entertainment, food, cars, and other categories. For businesses, this meant levying VAT on their goods and services, at each transactional stage from raw materials to finished products. More importantly, VAT would not only impact businesses operating in mainland, but also have a complex impact on businesses based in free zones as well. The entire framework of VAT taxation is an attempt to streamline macro and micro-financial compliance across all businesses based anywhere in UAE.

The UAE Government adopted awaited policy, whereby they took the role of mentor and educator, to get businesses compliant under the VAT framework. However, in 2019, with one calendar year of the VAT implementation having been completed, they adopted a bit more stringent compliance framework. This particular approach was to be used as a model for the VAT implementation across other GCC countries, where the concept of taxation is relatively new. The government deserves credit for smooth VAT implementation and it is evident from the overall compliance rate which is above 90% across all UAE businesses.

We provide valuable guidance to our clients on VAT services and a full suite of VAT services, right from VAT Health Checks, to registration, to ongoing VAT return filing, compliance and consultancy services. We believe that our clients should not only be VAT-ready and compliant, but should also be able to turn this into a competitive advantage with the right VAT services strategy.

Safeguarding

While VAT and VAT services may be a relatively new concept in the Middle East, VAT has been in force for many decades across other parts of the world. Leveraging VAT frameworks, regulations, and implementations from around the globe, our advice would be to take VAT seriously and engage with expert advisors, preferably those with global experience. Getting the VAT Health checked for your business (for VAT readiness) would be a good start.

How is the VAT registration done in 2024?

VAT registration in Dubai demands a strong knowledge of local tax legislation and procedures, not forgetting the appropriate language skills. Any deviation from these fundamental prerequisites will lead to many applications getting rejected. To minimize the issues with registration, many businesses opt to engage VAT services through specialists who provide service through a dedicated account manager, to assist you with the entire registration and compliance process.

Our team of expert VAT advisors provides multilingual support to help you obtain a VAT registration number in a quick time:

  • complimentary assessment of VAT registration obligations,
  • advice on registration dates and types,
  • guidance on the documentation and information required,
  • translation services where required,
  • review of all relevant registration material,
  • preparation and submission of all application forms,
  • registration on online submissions portals,
  • managing all correspondence with the tax authorities.

Business owners in the UAE cannot have more than one Tax Registration Number or TRN, unless it is prescribed in the UAE Executive Regulation. Starting from this point, owning more than just one branch does not mean applying for more than just one TRN when registering for VAT.

Why choose our services in Dubai?

Our specialists in Dubai provide:

  • in-depth knowledge of the VAT legislation,
  • single point of contact for all jurisdictions,
  • global presence,
  • consistency in process,
  • strong credentials,
  • flexibility in services,
  • personalized engagement,
  • multilingual team,
  • cost-effective solutions.

All VAT certificates issued in the UAE come with a specific identification number. This identification number is important all the tasks linked to the VAT payment in the UAE. More about the procedures for obtaining the VAT tax ID can be discussed with one of our local representatives.

If you want to open a company in Dubai, you can contact our company formation agents for details about the incorporation process. You can also count on us if you want to register for VAT in Dubai.