Key points about VAT registration in UAE - Submi Social

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Monday, 27 August 2018

Key points about VAT registration in UAE


It has become an obligation for all the businesses to get registered for VAT in UAE properly or else they will have to face the consequences.


FTA has made it necessary for all the businesses to implement VAT on it. For this purpose, it is really important for all the businesses to have a complete knowledge regarding VAT.
All the business sectors and people related to it are urged to make sure that they complete their knowledge of VAT so that they act according to it and run their businesses according to it in UAE.

The implementation of VAT started from 1st January 2018 and from that day all the business is required to comply with the rules regarding VAT. Go to this link https://farahatco.com/services/vat-consultants-in-uae/ to find out more about vat in UAE.

 

What is VAT?

Value added tax is basically the tax that has been implemented on the people living in UAE. the amount that would be charged by the people as VAT is 5 per cent. All the businesses that cross a specific threshold in their business are earning, they will have to pay for it.

To pay the VAT the first and most important thing is that all the businesses must first register themselves for VAT. This would be their first step towards VAT. If they are compliant with the VAT, they must pay for it.

 

Proper follow up will be carried out

The reason behind the proper follow up is to ensure that all the people pay tax on time and do not avoid it. if they do, they will have to face the consequences which they really wouldn’t want to.t at is why all the people must make sure that they have registered for VAT and know each and everything regarding it as well.

Rules and regulations

People who are not aware of the rules and regulations of the VAT can easily learn them. all the guidelines are available at the FTA's website. This website will provide all the necessary information to the people who think they are eligible for VAT.

 

Here are the main pointers that everybody needs to learn about regarding VAT in UAE;


> Businesses having supplies less than Dh375,000 are not required to register for tax
If the taxable supplies of the business cross Dh375,000, he is eligible to register for VAT but if he is willing to do it voluntarily, he can do so.

> Natural persons are subject to VAT if their supplies exceed the mandatory threshold
If the taxable supplies of the natural persons exceed the threshold of Dh375,000, they are subjected to VAT and they should get themselves registered for it.

> The tax registration number (TRN) is sufficient to carry out all commercial activities.
The person who gets registered for VAT will be assigned a tax number. This is a verified number which helps the business in carrying out their business activities.

> Registration is continuous
VAT Registration in UAE is continuous no matter whether the business is new or old.

> Computation of the mandatory limit according to revenues.
People need to calculate their annual turnover so that they can pay their tax on the basis of the value of their imported goods.

> Unregistered businesses are not Entitled to Impose a tax
If a person is not registered for VAT, he will not be entitled to pay tax.  this is because he will not be issued the tax invoices. If such businesses who haven’t registered for VAT imports any sort of goods, he will have to pay the tx before he clears the custom outlets. If anyone tries to avoid it, he will get penalized and will have to pay an administrative penalty of Dh20,000.

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