VAT Registration

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Mandatory Registration  :-

Resident:-

As per Article 13 of Federal law No. 8 of 2017,

Every Business Organization  who  has  a  Place  of  Residence  in  UAE shall register in the following situations :

a. Where the total  value  of  all  supplies exceeded  the  Mandatory Registration Threshold of AED 375,000 over the previous 12-month period.

b. Where  it  is  anticipated  that  the  total  value  of  all supplies will exceed the Mandatory Registration Threshold of AED 375,000 in the next thirty 30 days.

Non–Resident:-

Every Business organization who does not have a Place of Residence in UAE shall register for Tax if it makes supplies of Goods or Services, and where no other Person is obligated to pay the Due Tax on these supplies in the State.

Time limit:-

As per Cabinet Decision 52 of 2017,

The Person required to register for Tax pursuant to the provisions of the Decree-Law must file a Tax Registration application with the Authority within 30 days of being required to register.

Penalty:-

The failure of the Taxable Person to submit a registration application within the timeframe specified in the Tax Law will attract a penalty of AED 20,000

Voluntary Registration:-

Resident:-

Any Person who is not obligated to apply for Tax Registration may apply for Tax Registration in the following cases:

1.If he proves, at the end of any given month, that the total value of supplies or the expenses which are subject to Tax and were incurred during the previous 12-month period, has exceeded the Voluntary Registration Threshold of AED 187,500

2.At  any  time  that  he  anticipates  that  the  total  value  of  supplies  or  the  expenses  which  are  subject  to  Tax  that  will  be  incurred,  will  exceed  the Voluntary Registration Threshold of AED 187,500 during the coming 30-day period.

Let us understand how the threshold is calculated for Registration, As per Article 19 of Federal law No.8 of 2017, threshold includes the following:-

1. The value of Taxable Goods and Services.
2. The value of Concerned Goods and Concerned Services received by the Person.
3. The value of the whole or relevant part of Taxable Supplies that belong to said Person if he has, wholly or partly, acquired a Business from another Person who made the supplies.
4. The  value  of  Taxable  Supplies  made  by  Related  Parties  pursuant  to  the  cases  stated  in  the Executive Regulation of this Decree-Law

For Example, A Person made Sale of 375,000 in UAE,  Export of AED 200,000, Exempt supplies of AED 50,000, Imports of AED 25,000 & Reverse charge Mechanism of AED 10,000.

As per the above mentioned article, Turnover would be AED 610,000 (375,000+200,000+NA+25,000+10,000)

Exempt supplies should not be considered for Calculation.