The UAE’s Federal Tax Authority (FTA) has invited all businesses in the country to register for value-added tax (VAT) before January 1, 2018, following the completion of first phase of registration.
The VAT registration procedure is free of charge and can be completed online via the e-services portal on the FTA website.
To register, businesses must provide the following information: Applicant details, including entity and activity details, trade licences and manager’s details. Contact information is also required, as well as the documents of the authorised signatory, including scanned copies of their Emirates ID and passport.
The FTA reemphasised that a business will be required to register if the total value of its taxable supplies made within the UAE exceeds the mandatory registration threshold of Dhs375,000 over the previous 12-month period.
Taxable supplies include all supplies that are made in the UAE, whether subject to 5 per cent or zero-rated tax. All goods or services imported from abroad are considered taxable supplies.
The law defines a “supply” as any supply of goods or services in the UAE for consideration by any person in the course of conducting business.
All businesses must submit an application for registration as soon as possible in order to avoid the risk of missing the January 1, 2018, deadline, which would entail the administrative penalties stipulated under the law.
Under the new rules, the penalty for those who fail to pay tax is no less than Dhs500 and no more than triple the value of the tax on the transaction in question.
Should the company or person settle the fine they must also pay the tax owed. However, they can appeal any administrative penalties incurred.
VAT is set to come into effect in January 1, 2018 in the UAE.