Overview
Who is registered for VAT purposes?
When you register for VAT, you are registering as a person that is operating a business, not the business itself. A person can be an individual (i.e. operating as a sole trader), or a legal person (further defined in Section 4) or another form of entity (e.g. an unincorporated body such as a charity or club, a partnership or trust). A VAT registration covers ALL of the business activities undertaken by the registered person.
When you apply for VAT registration, you shall submit information relating to you as a person that is to be registered, and your current/intended business activities.
Federal or Emirate Government bodies and other similar entities in the UAE are to be registered in the name of the relevant body, notwithstanding the fact that they might not be operating a business in the normal sense.
Registration as Tax Group
A Tax group can be formed between two or more legal persons (each of which must be resident in the UAE), that are associated and which meet specific control criteria.
The prospective representative member of the Tax group is the only member who can create the group. In order to create a Tax group, and if you are the representative member, you must first apply for VAT registration in the normal manner using the standard VAT registration application form. Upon submission of the application, you will be allocated a Tax Identification Number (TIN) which is required in order to be able to proceed and complete a Tax group registration form. Please note that this is not a TRN and cannot be used for VAT purposes.
A separate Tax group registration application will also have to be completed. Only when the group application has been accepted and approved will you be issued with a TRN.
Registration Criteria
For Businesses Resident in Implementing State - Mandatory Registration:
You are required to register if you are a business that is resident in the implementing state and you are making supplies of goods or services in the UAE and either:
- Your turnover was more than AED 375,000 in the last 12 months; or
- You expect that your turnover will be more than AED 375,000 in the next 30 days.
For Businesses Resident in Implementing State - Voluntary Registration:
If you are not required to register, you will be eligible to apply for registration if:
- Either your turnover or expenses (which will be subject to VAT) were more than AED 187,500
in the last 12 months; or
- You expect that either your turnover or expenses (which will be subject to VAT) will be > AED 187,500
in 30 days.
For Federal or Emirate Government Bodies and Charities:
All Designated Government Bodies and Designated Charities must register for VAT purposes, whether or not they are otherwise required or eligible for registration (subject to relevant entity being listed in Cabinet Decision).
For Businesses Resident Outside the Implementing State:
You are required to register when the VAT law is in force if you are making or expect to make supplies of goods or services in the UAE and there is no other person who is required to account for the VAT due in the UAE on your behalf.
Penalty for Non Registration
The failure of the person to submit a registration application within the timeframe specified in the Tax Law attracts Administrative Penalty of AED 20000.