Businesses must register on the VAT portal if:
- The total value of its taxable supplies made within the UAE exceeds the mandatory registration threshold of AEED 375,000 over the previous 12 months, or
- It anticipates making taxable supplies with value exceeding the mandatory registration threshold of AEED 375,000 in the next 30 days
- If a business does not meet the threshold mentioned above then it is required to keep records which will enable the FTA to identify the details of the business activities and review transactions. The specifics regarding the documents which will be required and the time period required for keeping them can be found in Federal Law No (7) of 2017 on Tax Procedures and its executive regulation.
Businesses can register through the e-services portal on the FTA website, www.tax.gov.ae. You can contact the FTA Call center at 600-599-994 for any further assistance.
Computing returns and depositing the tax on schedule requires drawing up a schedule that works backwards from the final submission date. Insert a review time before the final date to allow you to thoroughly review the records before the submission date.
It is also imperative to manage the cash flow to ensure that cash is available for making the deposit.
Automated tools may help you to continuously record the tax liability and give you visibility of your tax liability on a daily basis. The tax tools may also help compute the tax returns and may as well file them electronically
VAT De-Registration Process
The recently released executive regulations on value added tax (VAT) make clear how a business might deregister itself from paying taxes.
Voluntary reasons for deregistration include dropping below the threshold of Dh375,000 in annual revenue, if it closes down or no longer trades in taxable goods or supplies.
Mandatory deregistration can also occur. If a company doesn’t voluntarily deregister, the Federal Tax Authority (FTA) may cancel a company’s VAT number because it has stopped making taxable supplies, with no plans to do so in the future.
According to the executive regulations, released last week, the registrant must apply to the FTA for deregistration if it meets any of the cases set out in August’s Federal Decree-Law, some of which are listed above, within 20 business days of any of them taking place.
If the deregistration application is approved, the FTA will cancel the tax registration of the company with effect from the last day of the tax period during which the company met the conditions for deregistration.
All outstanding taxes, returns, and administrative penalties must be paid before deregistration can occur, according to the executive regulations.
Tax groups may also be deregistered if they no longer meet the requirements to be considered a group, if the companies are no longer associated on financial terms, or if the FTA believes that continued tax group status would lead to tax evasion.