FTA VAT Registration in UAE – Complete Guide for Businesses
Introduction to FTA VAT Registration in UAE
On January 1 2018, the value added tax (VAT) was introduced in the United Arab Emirates (UAE) to diversify national revenue. Since then, it has played an important role in the UAE economy, affecting businesses and consumers equally.
For many businesses, especially new ones, VAT registration in UAE FTA can seem complex. That’s why we created this in-depth guide to simplify the FTA VAT registration process for you. In this article, you’ll learn about the eligibility criteria, how to use the FTA online portal for VAT registration, the required documents, and tips for staying compliant after registration.
What is VAT and how does it work?
VAT is an indirect tax levied on goods and services at each stage of the supply chain. Businesses collect VAT on sale and claim input VAT on their purchases, ultimately paying tax only on the value they add.
Example:
A manufacturer buys raw materials worth AED 100. After adding a value of AED 30, the selling price becomes AED 130. VAT at 5% = AED 6.5.
When the retailer adds AED 20 in value, the final price becomes AED 150 + 5% VAT = AED 157.5.
The consumer bears the VAT cost, making the tax system transparent and equitable.
Why is FTA VAT Registration Important?
✅ legal compliance
Businesses crossing the mandatory threshold of AED 375,000 must complete UAE FTA VAT registration within 30 days. Failing to do so can result in severe penalties.
✅ Better financial discipline
The FTA VAT registration guide recommends accurate record-keeping and transparent VAT reporting, which helps businesses manage cash flows and stay audit-ready.
✅Eligibility for Refunds and Incentives
Registered businesses can claim input tax refund. If input VAT exceeds output VAT, your business may receive a VAT refund, lowering your net tax burden.
Who Needs to Register for VAT in UAE?
A. Mandatory VAT Registration
If your taxable supply is more than AED 375,000 in the last 12 months or is expected in the next 30 days, then you have to start your VAT registration in the UAE FTA system.
B. Voluntary VAT Registration
If your taxable turnover AED is above 187,500, but AED is below 375,000, then voluntary registration is allowed. This helps startups to recover input VAT and increase reliability.
Sectors Exempt from VAT in the UAE
According to the federal decree-law number (8) of 2017, the following are VAT-free:
Bare land: supply of undeveloped plots
Financial Services: If not charged with clear fee or commission
Local passenger transport: taxi, buses, metro, etc.
Residential Building: Lease/Sale of Non-Zero-Retured Residential Assets.
Businesses in these areas do not need to complete FTA VAT registration.
Documents Required for FTA VAT Registration
To make the process effective through FTA online portal for VAT registration, ensure you prepare the following:
Business Documents
Valid Trade Licence
Memorandum of Association (MOA) or Partnership Agreement
Office Address Proof
Bank Account Details
Email Address & Mobile Number
Financial Turnover Statement
Customs Registration (if applicable)
Memorandum of Association (MOA) or Partnership Agreement
Passport Copies
Emirates ID Copies
Power of Attorney (if applicable)
Other Supporting Documents
Any additional documents requested during verification
FTA VAT Registration Guide - Major compliance after approval
Once your FTA VAT registration is completed, it is important to remain in line with the UAE VAT law. This way:
✅ Charge VAT correctly
Apply 5% VAT to taxable goods/services and reflect it clearly on your invoice.
✅ Keep an accurate record
As suggested by FTA VAT registration guide, keep all VAT-related documents for at least five years, including sales and purchases challans.
✅ File VAT returns immediately
Use the FTA online portal for VAT registration to submit your VAT returns (or as assigned).
✅ Issue VAT-Compliant Invoices
Each invoice must include:
TRN
Invoice Number & Date
Customer Details
Item Description
VAT Rate & Amount
✅ Follow FTA Guidelines
Make sure you suit the FTA standards on the invoice, return the deadline, and record-keeping.
Need Help?
Manual VAT management can be time consuming. With unicorn global solutions, you can:
- Apply the right VAT rate automatically.
- Real time track input and output VAT.
- Return-Redi Report.
- Simple VAT filing directly through FTA portal.
Looking for your FTA VAT registration and simplification? For more details Text us on whatsApp or call us today
Explore More Free Zones
We Assist with Opening Bank Accounts in Major Banks Across UAE
Topics
FTA VAT FAQs
Go to FTA online portal for VAT registration, create an account, upload your documents, and wait for your TRN approval.
Only businesses with taxable turnover above AED 375,000 must compulsorily register. Others can voluntarily choose the option.
A structured FTA VAT registration guide ensures accuracy, avoids penalties, and helps you understand your compliance obligations.
If failed to register for VAT, AED may be fined 10,000 and additional fine for non-non-non-non-non-compliance.
If all documents are correct, it usually takes 5 to 20 working days to obtain a VAT certificate and TRN from FTA.
VAT registration is free through FTA portal. However, if you use an advisor or agent, you can levy professional fees.
