VAT Registration in the UAE

VAT Registration in the UAE:
Conditions and Required Documents
Introduction
Value Added Tax (VAT) is an essential component of the UAE’s taxation system, implemented in 2018 to diversify the nation’s economy and reduce dependence on oil revenues. VAT is levied at a standard rate of 5% and ZERO on most goods and services, and businesses are required to register with the Federal Tax Authority (FTA) if they meet certain criteria.
Who Needs to Register for VAT in the UAE?
VAT registration in the UAE can be mandatory or voluntary, depending on a business’s taxable turnover.

1. Mandatory VAT Registration
   Businesses must register for VAT if:
   • Their taxable supplies and imports exceed AED 375,000 within the past 12 months, Known as a historic test
   • They expect their taxable turnover to exceed AED 375,000 within the next 30 days, Known as a future test
2. Voluntary VAT Registration
   Businesses can voluntarily register if:
   • Their taxable supplies and imports exceed AED 187,500 within the past 12 months.
   • They anticipate exceeding this threshold within the next 30 days.
   Voluntary registration is often beneficial for small businesses and startups as it allows them to reclaim input VAT on business expenses.
3. VAT Group Registration
   Two or more businesses can apply for VAT group registration if they:
   • Have a fixed establishment in the UAE.
   • Are related or associated (e.g., parent companies and subsidiaries).
   • Meet common control and financial relationship requirements.

Documents Required for VAT Registration in the UAE
The FTA’s online portal streamlines the VAT registration process. Applicants must submit the following documents:

1. Trade License Copy
   o Valid for each entity registering for VAT.
2. Passport Copies of Business Owner(s)/Partner(s)
   o For all owners, shareholders, and partners.
3. Emirates ID Copies
   o For UAE residents involved in the business.
4. Proof of Business Activity
   o Invoices, contracts, or other documents demonstrating taxable activities.
5. Turnover declaration (Last 12 Months)
   o To verify turnover and confirm eligibility.
6. Memorandum of Association (MOA)
   o For businesses with multiple partners.
7. Bank Account Details
   o Active UAE bank account details for VAT payments and refunds.
8. Customs Registration Documents (if applicable)
   o Required for import/export businesses.
9. Business Contact Information
   o Including physical address, email, and phone number.
10. Authorized Signatory Documents
    o Power of attorney (POA) or authorization letter if a tax agent is appointed.