VAT Registration

• Mandatory registration would be required to be taken if the taxable supplies exceeds AED 3,75,000 ( calculated over a 12 month period)
• Voluntary registration threshold would be AED 187,500

VAT Return Filings

• VAT Returns are completely online. No Manual submissions are allowed.
• Periodicity for filing VAT returns shall be quarterly or monthly depending upon the turnover.
• In case the return filing date falls on a public holiday or weekend, the deadline in that case shall be extended to following first working day.

Providing Knowledge and Training to Management &Staff

• Penalty provisions are very stringent in VAT law.
• Penalties are levied at 3 times the amount of tax in case of administrative penalties
• Penalties are levied at 5 times the amount of tax evaded in case of tax evasion penalties.

Scope & Rate of Tax

• Standard rate of tax @ 5% for both goods & services.
• Exempt Supplies:
  • The supply of some financial services (clarified in VAT legislation)
  • Residential properties
  • Bare land and
  • Local passenger transport
• Zero Rated Supplies:
  • Exports of goods and services to outside the GCC
  • International transportation, and related supplies
  • Supplies of certain sea, air and land means of transportation (such as aircrafts and ships)
  • Certain investment grade precious metals (e.g. gold, silver, of 99% purity)
  • Newly constructed residential properties, that are supplied for the first time within 3 years of their construction
  • Supply of certain education services, and supply of relevant goods and services;
  • Supply of certain Healthcare services and supply of relevant goods and services.

Invoicing under VAT

• The words “Tax Invoice” should be clearly displayed on the invoice.
• Name, address & Tax Registration number of both supplier & Receiver should be mentioned on the invoice
• Date & Place of Supply
• Description of goods or services supplied
• Gross Amount, Tax Amount and Total amount payable expressed in AED
• A simplifiedtax invoice can be issued in certain cases.
• No tax invoice is required to be issued in certain cases

Assistance in Determination of Place of Supply

• Place of supply would determine whether a supply is made with in the UAE or outside the UAE.
• In case of supply of goods, as a general rule, the place of supply would be the location of goods where the supply takes place.
• In case of supply of services, as a general rule, the place of supply would be where the supplier is established.

Assistance in Determination of Value of Supply

• Value of Supply determines the taxable value of the supply and the amount of tax that has to be paid for it.
• If the consideration for a supply is just in money,then the value of that supply is the amount of money received.
• If the consideration is partially in Money, then the value will be determined as per the market value exclusive of VAT.

Assistance in Determination of Date of Supply

• Date of supply determines under which VAT period the transaction falls under.
• In case of services, the date of supply shall be the earliest of the following:
  • Date on which services are completed
  • Date of Receipt of Payment
  • Date of Issuance of Tax Invoice.
• In case of continuous services over a period of several months or years, then the date of supply will be the earlier of:
  • Date of Receipt of Payment
  • Date of Issuance of Tax Invoice.
• In case of Goods, the date of supply shall be the earliest of the following:
  • Date of removal/transfer of goods under the supervision of supplier
  • Date on which goods are made available to customer for possession
  • Date on which the assembly or installation of the Goods was completed where goods are supplied with assembly and installation.
  • Date on which goods are cleared by the customs authority in case of imports.
  • Date of Receipt of Payment
  • Date of Issuance of Tax Invoice

Claiming Input Tax

• Input Tax means tax paid by a Person or due from him when Goods or Services are supplied to him, or when conducting an Import.
• Input Tax can be reduced from the Output tax liability at the time of making VAT payments.
• There are certain cases mentioned in the Act where Input Tax cannot be claimed.

Tax Group Registration

• Tax Group means two or more Persons registered with the Authority for Tax purposes as a single Taxable Person.
• Conditions to be met for Tax Group Registration
  • Each shall have a place of establishment or fixed establishment in the State
  • The taxable persons should be Related Parties.
  • One or more persons conducting business in a partnership shall control the others.

Other Services

Documents Required:

• Trade License
• Memorandum of Association/ Articles of Association
• Passport and Emirates ID of Shareholders/li>
• Passport and Emirates ID of Manager ( If Manager is different from Shareholders)
• Description of Business Activity
• Complete Office Address
• Mobile and Landline Number
• E-mail ID
• Bank Account Details with IBAN
• Last 12 months Business Turnover
• Expected Turnover in 30 days
• Customs Number, if any
• Do you Intend to Import/Export goods or services
• Proof of Authorization of Authorized Signatory

Time Involved:

• VAT authorities generally take 10-12 days to issue VAT Registration Certificate.