VAT (Value Added Tax) is an indirect tax initially with a very nominal rate i.e. 5%, applicable for most of the goods and businesses. Though UAE government has exempted food items, education and healthcare services from VAT but people can notice a little rise in their cost of living. However, it needs to be considered that VAT will not strain the wallets much but allows the high living standards not only to remain high but improving.

To comply with VAT and related legal requirements businesses need to make changes in their existing processes. Companies have to ensure that their accounts or records are well managed according to the new VAT regulations implemented by the government effective from 1st Jan 2018.

If a business in UAE exceeding AED 375,000 with the supplies and imports of goods/services subject to tax then it must register for VAT as per the Federal Tax Authority. As per FTA, all businesses must ensure the recording of their financial transactions, apart from that VAT registration requirements have done and ledgers are updated in time to avoid penalties.

To complete the VAT registration in UAE, the service is available 24/7 through the FTA’s website. Businesses should visit the website www.tax.gov.ae, select the e-Services portal, sign up, and create an account. After the email verification, one can log in and register the business.

The FTA has advised businesses to provide precise information and fill up the application form accurately. Scanned documents including the trade/business license, passport/Emirates ID of the Manager/Owner of the business must be attached to complete the registration process.

The passport/Emirates ID of the authorized signatory must be submitted if the signatory is not the manager him/herself along with the proof of authorization including articles of association, power of attorney attested by notary etc.

There are a couple of documents required that come with registering with the VAT in UAE. The nature of the organization matters in registration.
For a businessman applying for a VAT certificate as an individual, the following are needed:

• Applicant’s request letter with signature
• Applicant’s resident permit
• Applicant’s passport copy

For businessmen registering as an authority, the requirements are as follows:

• Decree copy
• Application letter with authorized signatory
• Act of incorporation copy

The requirements for a Dubai-based business registering for VAT are as follows:

• Applicant’s application letter signed by the company’s authorities
• Trading license copy