VAT: Register at least 20 working days before Jan 1

By Rajive Singh

FTA clarifies registration procedure for VAT

Abu Dhabi 30 November 2017: The Federal Tax Authority (FTA) has called on natural and legal persons exercising business in the UAE to expedite their registration process for Value Added Tax (VAT) to avoid the risk of missing the January 1, 2018, deadline.

This applies to businesses whose taxable supplies and imports of goods and services exceed Dh375,000 over the previous 12 months. Taxable supplies are identified as all supplies of goods and services made by a Person that are not exempt.

Registration is available on a 24/7 basis through the Federal Tax Authority’s website. Businesses are required to visit the website, select the e-Services portal, sign up and create an account. Once the email has been verified, they can log in and register.

The FTA has urged businesses to provide accurate information and make sure they enter it properly into the application form. To complete the registration process, scanned documents must be attached, including the business or trade licence, passport/Emirates ID (for UAE residents) of the manager or owner of the business, and the authorised signatory (if the signatory is not the manager him/herself), as well as proof of authorisation for the manager or signatory (e.g. articles of association, power of attorney attested by notary, etc.).

Issuing a Tax Registration Number (TRN) may require up to 20 working days or less. Therefore, and in order to ensure that the application is processed – and the TRN issued before January 1, 2018 – the FTA urges businesses to complete their registration to avoid the administrative penalty of Dh20,000, as well as additional penalties related to late payment of tax , according to the Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE

Two or more legal persons conducting business in partnership may apply for Tax Registration as a Tax Group if: each of them has a place of establishment or fixed establishment in the UAE; if the persons are related parties, i.e. they are not separated in economic, financial or regulatory aspects; or if one or more of the Persons in the group control the others.

Persons intending to register as a Tax Group need to nominate a representative member who shall apply to register them. The representative member applies first by completing a VAT registration application stating that the intention is to be part of a Tax Group.

After the representative member is issued with a Tax Identification Number (TIN), the additional members of the group may be added through Tax Group Registration. Members can be added whether they have registered separately or not. After the process is complete and the application to add members has been submitted, a TRN will be issued for the whole Group. More information can be found in the Legislation and Guides section, on the FTA website.