Value Added Tax (VAT) has become an essential part of trading in UAE. With the introduction of VAT in 2018, eligible businesses will have to register with the Federal Tax Authority (FTA) and follow the VAT rules. In this guide, we cover everything required to learn about VAT registration in the UAE, including eligibility, procedures, documentation and punishment.
VAT, or Value Added Tax is an indirect tax levied on consumption of goods and services. The standard VAT rate in the UAE is 5%, and it applies to most goods and services unless they are discount or zero-rated.
Introduced by the UAE government in January 2018, VAT aims to diversify the country’s economy and reduce dependence on oil revenue. The collected VAT helps in funding public services such as healthcare, infrastructure and education.
Mandatory VAT registration: AED more than 375,000 annual taxable supply and import business.
Voluntary VAT registration: AED can voluntarily register business with more than 187,500 turnover or spending.
This rule applies to both onshore and free zone companies, making business VAT registration legal requirement for many people
The VAT registration process in UAE is directly and completely online through the Federal Tax Authority (FTA) portal.
1. Create an account on FTA portal: https://eservices.tax.gov.ae
2. Fill your business details and TRN (tax registration number) application form .
3. Upload all the necessary documents (see next part).
4. Submit the form for review.
5. Wait to confirm and issue your VAT certificate.
Be sure to keep a copy of the confirmation email and regularly check the FTA portal for update on your application status.
1. Trade license copy.
2. Emirates ID and Passport Copy of Owner/Partners.
3. Company contact details and bank account information
4. Memorandum of Associatio(MOA)
5. Financial details or required turnover details
6. Customs registration (if applicable)
Accurate and complete documents can help avoid delay in your VAT registration in UAE approval.
The average VAT registration timeline in the UAE may vary depending on the completion of your documents and the processing speed of the FTA. Usually, the process takes 5–20 working days. Once approved, your company will receive a TRN (tax registration number) and a digital VAT certificate, which should be displayed and used for tax invoicing.
1. Failure to register for VAT: AED 10,000
2. Failure to display TRN on the invoice: AED 5,000
3. Failure to file VAT returns on time: 1,000 AEDs for the first offense, AED for frequent offense 2,000
4. Failure to maintain appropriate records: AED 10,000
To avoid these punishments, ensure timely trade VAT registration and compliance with all FTA requirements.
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No, it is mandatory for businesses more than the AED 375,000 limit. Others can voluntarily register
Yes, if this turnover is found from the threshold, it must be registered for VAT - even if it operates in a specified area.
You can verify your VAT registration status using FTA's online TRN verification equipment.
No, VAT registration with FTA is free from registration cost.
Once registered, you have to charge VAT on taxable supply, give the file quarterly or monthly returns, and maintain all records for at least 5 years.
