Navigating the complexities of doing business in a new country can be difficult, and the UAE is no exception. If you’re a foreign company looking to conduct activities related to customs clearance in the UAE, one important requirement is obtaining Value Added Tax (VAT) registration. This blog post will provide clear guidance on how to go about doing this – so read on for all you need to know about VAT registration UAE for clearance companies in Dubai and other parts of the UAE!
What is VAT in UAE?
Value-Added Tax (VAT) was introduced in UAE as part of a wider initiative to diversify the economy and make it more competitive on an international level. It is now mandatory for companies or businesses operating in UAE to register with the Federal Tax Authority (FTA), if their annual taxable supplies and imports exceed AED 187,500.
VAT Registration for Clearance Companies in UAE
Clearance companies in the UAE must register for VAT with the Federal Tax Authority (FTA). This is a mandatory process, and firms cannot surpass any threshold without registering. In order to register, companies need to submit certain documents to the FTA, including but not limited to: a valid Emirates ID card of the applicant; official registration certificate from the relevant government department; and bank details.
Clearance companies or customs brokers that are engaged in activity related to clearance of goods and services may require a separate VAT registration, even if they are already registered with the FTA. This is because VAT applies on the import and supply of goods and services, which involves multiple transactions at different stages, such as freight forwarding and storage etc. Therefore, providing a single VAT registration would not be sufficient to cover all these transactions.
Once registered, companies have to keep track of all transactions made between them and other businesses or individuals related to their business activities. They then have to declare these transactions as well as pay any due taxes by submitting a periodic tax return. Companies can also use an authorised auditor or approved e-service provider for VAT filing purposes if required.
Overall, VAT registration is a simple yet important process for clearance companies in the UAE. It allows businesses to remain compliant with taxation laws and regulations while also providing them with access to other benefits such as input tax recovery. As such, it should be undertaken quickly and efficiently.
Documents that are required to be provided for VAT Registration by the FTA
The FTA requires certain documents to be provided for VAT registration by clearance companies.
- A copy of a valid trade license or a letter from the Department of Economic Development
- Organizational chart detailing all business divisions and subsidiaries, if any
- Memorandum and Articles of Association (M&A) or other legal documents that support the formation of the company
- Details about individuals who are authorized to sign on behalf of the company in fiscal matters
- Listing of type, number, and details of supplies made
- Partial or complete financial statements including balance sheet, income statement, fixed assets register, etc. for 12 months prior to application date
- Copy of passport with residence visa page for each shareholder and/or partner
- Bank details and specimen signature cards
- Copy of Emirates ID or UAE National ID for non-fiscal matters
- Details of any existing business operations in the UAE, and other countries if applicable
Above documentation must be provided as part of the VAT registration requirement by the FTA. Additional documents may also be requested upon review to determine eligibility for VAT registration and approval from the FTA. It is important to have all necessary documents on hand to complete the process in a timely manner.
To ensure that your application is accepted, it is essential to provide all relevant information about your organization including its legal structure, scope of activities, composition of shareholding and other pertinent information in order to demonstrate compliance with UAE’s VAT laws.
Data that is needed to submit to the Authority of VAT registration in the UAE
The Authority of UAE requires companies to provide the following information when registering for VAT:
- Company name, address and contact details
- A copy of the company’s Trade License or Certificate of Incorporation
- A copy of the Memorandum & Articles of Association (M&A) and/or partnership agreement
- Details of all directors and shareholders
- Date on which the business commenced operations in UAE and a reference number issued by Department of Economic Development (DED).
- A formal letter from a chartered accountant confirming that it is acting as an agent for tax purposes.
- Bank account details (IBAN numbers etc.)
It is important to note that additional documents may be required during the registration process, depending on each company’s specific circumstances.
It is also important to ensure that all documents have been accurately completed and signed by authorized representatives of the company before submitting them for registration. Once the submitted documents have been approved, companies must obtain a valid Tax Registration Number (TRN) from the Federal Tax Authority in order to legally operate in UAE.
Companies must also apply for a Value Added Tax (VAT) certificate issued by The Ministry of Finance (MOF). This will allow them to start invoicing customers with VAT charges and file any necessary tax returns with the authorities. By following this procedure, companies should be able to successfully complete their VAT registration in UAE.