VAT registration refers to obtaining a Tax Registration Number (TRN) from the Federal Tax Authority (FTA). This registration enables a business to recover input VAT credit, levy VAT on its taxable supplies, and submit periodic VAT returns. For startups in the UAE, securing a TRN is a critical step in business compliance. Without it, a company is not legally permitted to charge VAT and may incur penalties for non-compliance. Furthermore, customers and suppliers often request a TRN during due diligence, making VAT registration an essential factor in establishing credibility in the market.
Who Is Required to Register for VAT in the UAE?
Not all businesses are obliged to register immediately; the requirement depends on the company’s turnover:
- Mandatory VAT registration: Businesses must register if their taxable supplies and imports exceed AED 375,000 per year.
- Voluntary VAT registration: Businesses may register voluntarily if their taxable supplies or expenses exceed AED 187,500 per year.
Accordingly, even small startups may opt for voluntary VAT registration to recover input VAT on expenses and demonstrate compliance from the outset.
Step-by-Step Guide: VAT Registration for New Companies in UA
Registration for VAT may seem daunting at first, but with planning, it is simple. Here is a step-by-step process.
Step 1: Determine Eligibility
The first step is to calculate your company’s estimated turnover. If you are above the compulsory or voluntary thresholds, you are entitled to apply through the FTA. Certain startups choose to register early in order to avoid delay once they begin trading.
Step 2: Get Required Documents Ready
You will need a collection of documents before you can start the online application:
- Copy of trade license.
- Certificate of incorporation or formation documents.
- Passport copies of the managers and owners of the company.
- Emirates ID of the authorized signatories or shareholders.
- Memorandum of Association (MOA).
- Bank account information of the company.
- Projected financial statements (in case of startups).
Step 3: Create an FTA e-Services Account
The FTA portal is where all VAT registrations occur. Someone representing the company needs to register an online account, which will be utilized when making applications, sending returns, and correspondence with the FTA.
Step 4: Complete the VAT Registration Form
Log in to the FTA portal and complete the VAT registration form. You will need to supply:
Company details and business activities.
Estimated turnover and spend.
Import and export information (where applicable).
Information of group companies (if registering in a VAT group).
Step 5: Make Payment and Submit Documents
Upload the necessary documents and submit your application. The FTA verifies the submission to make sure it is correct. Incomplete or erroneous information may delay approval, so double check before submission.
Step 6: Get Your TRN
Once approved, your business will be given a standard Tax Registration Number (TRN). You will then be able to charge VAT on sales, claim back input VAT credits, and file VAT returns from here.
Types of VAT Registration in the UAE
Businesses may be eligible for several classes of VAT registration depending on their type:
Mandatory Registration – For businesses with taxable supplies of AED 375,000 or more.
Voluntary Registration – For businesses with taxable expenses or supplies of AED 187,500 or more.
Group Registration – For companies with multiple entities under common control, so that they can get registered collectively as a single VAT group.
Documentation Requirements in Detail
Ensure to furnish the following documents:
- Trade license and company incorporation documents.
- Shareholding structure and MOA.
- Identification documents (passport & Emirates ID).
- Documentation of business address (Ejari or tenancy agreement).
- Bank account information.
- Expected or projected revenue/expense projections.
Keeping these documents in hand saves time and minimizes back-and-forth to the FTA.
Seek the Expert Services of Top Tax Consultants in UAE
For new businesses and start-ups, ensuring VAT compliance is one of the first financial obligations to address. Timely VAT registration in UAE helps businesses avoid penalties, enhances credibility, and enables them to recover input VAT on eligible purchases.
While the process, ranging from document preparation to applying with the Federal Tax Authority (FTA), may seem complex at first, it can be managed smoothly with proper preparation and expert assistance. Companies may opt for either mandatory or voluntary registration, depending on their circumstances. Once issued with a Tax Registration Number (TRN), a business can legally charge VAT, recover input tax, and strengthen long-term trust with clients in the UAE.
If you are establishing a new business and require professional assistance with VAT registration in the UAE, our experts are ready to guide you through every stage of the process, ensuring full compliance with FTA regulations. Contact us today, and we shall be glad to assist you.
