DUBAI 13 November 2017: Here’s how to register your business for Value Added Tax (VAT), which is set to go into effect on January 1, 2018.
This leaves less than 50 days – or 33 business days – before it affects all purchases of goods and services, except in some cases where zero-rate or exemptions are applicable, as stipulated in Federal Decree-Law No. (8) of 2017 on Value Added Tax, issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, as well as in the Executive Regulation of said Federal Decree-Law recently adopted by the Cabinet.
Tax registration can be done through the Federal Tax Authority’s website – www.tax.gov.ae – 24 hours a day, 7 days a week. The registration process is seamless and simple, taking no more than 20 minutes.
The website also provides guidance on how to complete various transactions seamlessly. The Federal Tax Authority is urging all businesses to seek to understand the implications of implementing the VAT regime, familiarise themselves with the relevant legislation that has been issued, and make every effort to align their work with the reporting and compliance requirements imposed by the Government.
Value Added Tax will have a standard rate of 5% on the import and supply of goods and services at each stage of production and distribution, as well as on deemed supply.
The new tax provides additional sources of income for the government to continue investing in the necessary infrastructure for a future-ready economy. VAT will also allow the government to carry on with developing and providing high-quality services, all the while reducing its dependence on oil and building an innovation-based knowledge economy and a happy society.
FTA Director-General Khalid Ali Al Bustani said: “We have allowed businesses considerable time to fulfill their registration requirements, with free registration through our website 24 hours a day, seven days a week, as well as extensive awareness campaigns. The registration process is seamless and simple, taking no more than 20 minutes.”
Al Bustani added: “The cooperation from the business sector has been commendable, as businesses and institutions took advantage to meet their tax obligations and ensure full and perfect compliance with the VAT system. With the countdown to the introduction of the tax system, we call on businesses to expedite their registration and compliance procedures. They must make changes to their core operations, their financial management procedures, their accounting methods, and the technical means they use, in addition to changes in their human resources, including accountants and tax advisers.”
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 Dh375,000 over the previous 12-month period. A business may choose to register for VAT voluntarily if their supplies and imports are below the mandatory registration threshold, but exceed the voluntary registration threshold of Dh187,500.