VAT REGISTRATION & FILINGS OF RETURNS
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If you are a business owner in UAE or planning to establish your business roots in the Emirates, be it a small, medium or a large business, you need to get your business registered under VAT law. Before moving to the process let’s have a look at the entities who should register for VAT, the importance of VAT followed by the registration process and other essential documents and information. The Middle-East country UAE is one of the most dynamic countries of the world. The Emirates have got several zones that have been considered as a business free-tax zone that became the center of investment for foreign investors. If your business is registered under VAT law, it signifies that it holds a recognition in the eyes of the government. Having realized this, the GCC countries have recently registered themselves under VAT law and implemented it by 1st Jan 2018 with 5% as the VAT rate.
Importance of VAT Registration in Dubai, UAE.
Most important reasons that define why VAT registration is considered as an essential part are:
- It boosts the business profile
- It averts financial penalties
- One may claim for VAT refunds
- It helps to grab a mass market
VAT Registration Process in UAE
To initiate VAT registration in UAE, one must fill the VAT Registration form online and submit the essential documents required along with the form in order to attain VAT Number. The entire registration process takes place on an online platform. Let’s have a look at the documents.
- Copy of trade license
- Passport copy of business owner and partners
- Copy of Emirates ID held by owner and partners
- Memorandum of Association (MOA) of the company
- Company contact details
- Bank account details
- The income statement for the last 12 months
- Nature of business and activities performed
UAE, VAT Registration Online
The online registration for VAT in UAE can be done through the VAT registration portal available on the website of www.tax.gov.ae. The steps to be considered while doing an online registration involves filing:
- About the Applicant
- Details of the Applicant
- Contact Details
- Banking Details
- Business Relationship (optional)
- About the VAT Registration
- Review and Submit
Once the application is submitted, the FTA will review the information and documents submitted, and if everything is found to be satisfactory, the application will be approved, and a Tax Registration Number (TRN) will be allotted.
What is VAT Certificate?
VAT Certificate is a document that serves as an official confirmation that a business entity is registered under the VAT law for the purpose of tax collection at every step of product development. This certificate is the final step after the VAT registration process, and is issued by the Ministry of Finance and has got a unique number for different business entities registered. VAT certification certificate UAE is a proof of business entities being registered under the UAE Tax Law and assures that the business entity is known by the Government of Emirates. Let’s have a look at the contents of the VAT certificate. A VAT Certificate holds the following essentials:
- VAT Registration Number
- Date on which the business entity became VAT registered
- Issue date
- Registered address
- First VAT return period
- VAT return due date
- Start and end dates of tax period
VAT Return Filling
Value Added Tax (VAT) is charged on the consumption of goods and services. Be it a new business or an established business, filing for VAT return acts as a savior and also holds a good image in the eyes of the government. Today almost more than 180 countries have accepted the procedure and this got spread worldwide at a faster pace. The Middle East countries, especially the United Arab Emirates, which has been tirelessly working on setting itself as a business hub, has understood the importance of VAT filing. Realizing this, the GCC countries have entered the VAT law and agreed at a VAT rate of 5%. If you are building your business plan for UAE, you should be aware of the VAT return filing and VAT related process existing there. Do have a look at the VAT filing terms and processes and why it got accepted at a global level.
What is VAT Return Filing and VAT Compliance?
In simple terms, VAT return filing states how much VAT is to be paid or reimbursed by the tax authorities. A VAT return is done quarterly and it helps the business to track the business VAT path. VAT is also charged for business entities involved in the business activities with other countries. While carrying out these activities it’s better to be VAT compliant to avoid any kind of penalty that becomes a hindrance in the way.
How to Calculate VAT Due/Liability?
The taxpayer is responsible for calculating the VAT return during the filing process. It is calculated considering the following factors:
- The total sales and purchases of your business in the relevant return period
- The amount of VAT you owe for sales
- The amount of VAT you can claim for the purchases made
In the end, if you owe more VAT than you are able to claim, then you need to pay the difference. If the situation goes vice-versa, you can either ask for the refund of excess VAT or can carry forward the excess to next return period.
Who Should File VAT Return?
All registrants are required to file VAT return, irrespective to the type of VAT registration or sales, purchases, output tax, input tax, etc.
Benefits of Filing VAT Return
- VAT compliance brings along with it a certain business goodwill. In fact, many large firms are often reluctant to conduct business with companies that aren’t VAT-registered
- The business image gets highlighted once registered under VAT law
- VAT is easier to manage as compared to any other indirect tax
Thus, you can see how important it has become for business entities to implement VAT filing process and also to become VAT compliant while carrying out multi-national businesses. VAT filing not only protects your business but gives a legal assurance and proof of your business existence and it holds an upper-hand in the arena of tax payments and avoids financial loss. Are you trying to figure out how to initiate the process? Well, we have a solution for you.