With VAT starting on 1 January 2018, the Federal Tax Authority is now accepting registration applications. Businesses that need to register should not leave it until the last week of December. The application asks for details that take time to gather, and you will need your Tax Registration Number (TRN) before you can issue compliant tax invoices.
Do you need to register?
Look at the value of your taxable supplies and imports:
- over the previous 12 months, or
- expected over the next 30 days.
If either exceeds AED 375,000, registration is mandatory. If it exceeds AED 187,500, you may register voluntarily. Businesses that only make exempt supplies do not register.
Related companies under common control may be able to register as a tax group, filing a single return. This can simplify compliance, but all members become jointly responsible for the group’s VAT.
What the application needs
Have these ready before you start:
- trade licence and constitutional documents;
- details of owners and authorised signatories, with passport and Emirates ID copies;
- bank account details;
- turnover figures and supporting evidence; and
- details of expected imports and exports, and customs registration if applicable.
Getting ready for day one
Registration is only the first step. Before 1 January, make sure that:
- Your invoices will show the information a tax invoice requires, including your TRN.
- Your accounting system separates VAT on sales and purchases, and can report it by period.
- Your prices are clear about whether they include VAT, particularly for consumers.
- Your contracts that run past 1 January deal with VAT properly.
- Your suppliers are asked for their TRNs, so you can recover input tax on their invoices.
The first tax period
Most businesses will be assigned quarterly tax periods, with returns and payment due by the 28th day after each period ends. The first returns will arrive sooner than many expect.
If you would like help with your registration, or a review of your readiness for January, please get in touch.
This article is general information based on the rules as we understand them at the date of publication. It is not advice on your circumstances. Laws and practice change, so please speak to us before acting on it.
