What Is The Procedure of Vat Registration In Dubai?


In the professional world, VAT is a crucial source of income for a country’s government, charged upon goods and services levied at each point of sale. In the UAE, consumers have to pay 5% extra for the purchase of particular goods and services. It is mandatory to apply for VAT registration for business owners who are earning an annual turnover of more than 5 Lakhs on the supply of goods and services. However, if the turnover is of a particular business is less than the desired limit, the business owner can avoid paying VAT to the government authorities.

Before moving further, let’s first understand what VAT is all about.

VAT Registration in Dubai

What is VAT?

VAT or Value Added Tax is an indirect tax levied on local and imported goods at each stage of production. Most of the people confuse VAT with sales tax, however, sales tax is collected once at the time of final purchase by a consumer, while VAT is collected at several points throughout an item’s production at the time of each sale is made. In short, it is a principle where a seller charges VAT from the buyers and then pays to the government.

After learning about its meaning, let’s know more about its purpose. The main purpose of VAT is to increase the government’s revenue collection through consumer spending, and its collection is considered a good way to maintain a balance between income tax and consumption tax.

How to register for VAT in Dubai?

More than 160 countries are having a value-added taxation system based on tax payer’s consumption, and not his/her income. VAT registration is classified into three categories- mandatory VAT registration, Voluntary VAT registration, and Exemption from VAT registration. One must know the eligibility criteria while applying for VAT registration. For instance, if your business turnover exceeds the mandatory registration threshold of AED 375,000 and the voluntary registration threshold of AED 187,500, then you can apply for VAT registration in Dubai.

One can fill the registration form online and submit the concerned documents along with the application form in order to receive a VAT number. After that, the Federal Tax Authority (FTA) will evaluate the information and documents, thus deciding on its approval. 

Documents Required during VAT Registration in Dubai

  • A copy of passport and Emirates ID
  • A copy of the trade license of a company
  • An elaborated description of what business activities one is dealing with
  • A record of business turnover of the last 12 months in AED
  • Details of bank accounts

These are the mandatory documents required. However, you may require following documents:

  • A record of the estimated value of imports and exports for one year to each GCC countries
  • A record of expected turnover in the next 30 days
  • Other documents such as a certificate of incorporation, articles of association, and power of attorneys are needed for authorizing a person’s identity and his/her commercial activities running in the UAE

Now that you are aware of everything that is needed for VAT registration in Dubai, you can hire professional consultants to eliminate the complexities of the registration process.

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