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FTA clarifies VAT registration process
November 30, 2017
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ABU DHABI: The Federal Tax Authority (FTA), has called on natural and legal persons exercising business in the UAE to expedite their registration process for the Value Added Tax (VAT), to avoid the risk of missing the deadline, on 1st January 2018.

This applies to businesses whose taxable supplies and imports of goods and services exceed Dhs375,000 over the previous 12 months. Taxable supplies are identified as all supplies of goods and services made by a person who is not exempt.

Registration is available on a 24/7 basis through the VAT website. Businesses are required to visit the website, select the e-Services portal, sign up and create an account. Once the email has been verified, they can log in and register.

The FTA has urged businesses to provide accurate information and make sure they enter it properly into the application form. To complete the registration process, scanned documents must be attached, including the business or trade licence, passport or Emirates ID, for UAE residents, of the manager or owner of the business, and the authorised signatory, if the signatory is not the manager him/herself, as well as proof of authorisation for the manager or signatory for example articles of association, power of attorney attested by notary, etc.

Issuing a Tax Registration Number, TRN, may require up to 20 working days or less. Therefore, and in order to ensure that the application is processed, and the TRN issued before 1st January, 2018, the FTA urged businesses to complete their registration to avoid the administrative penalty of Dhs20,000, as well as additional penalties related to late payment of tax, according to the Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

Two or more legal persons conducting business in partnership may apply for Tax Registration as a Tax Group if each of them has a place of establishment or fixed establishment in the UAE; if the persons are related parties, thus not separated in economic, financial or regulatory aspects; or if one or more of the Persons in the group control the others.

Persons intending to register as a Tax Group need to nominate a representative member who shall apply to register them. The representative member applies first by completing a VAT registration application stating that the intention is to be part of a Tax Group.

After the representative member is issued with a Tax Identification Number, TIN, the additional members of the group may be added through Tax Group Registration. Members can be added whether they have registered separately or not. After the process is complete and the application to add members has been submitted, a TRN will be issued for the whole Group.

More information can be found in the Legislation and Guides section, on the FTA website.

FTA has recently opened registration for individuals interested in working as Tax Agents and for Tax Accounting Software Vendors, in addition to providing the necessary technical support to help these vendors as they assist UAE-based businesses comply with tax regulations.

The Federal Tax Authority has defined standards and specifications that must be met by the Tax Agent, who is defined by Federal Law No. (7) of 2017 on Tax Procedures as (Any Person registered with the Authority in the Register, who is appointed on behalf of another Person to represent him before the Authority and assist him in the fulfilment of his Tax obligations and the exercise of his associated tax rights.)

This step comes as part of the Authority’s commitment to providing the necessary technical support and implement a tax system that adheres to international best practices. It allows Taxable Persons to fully meet their tax obligations, while saving them time and effort, and reducing the margin of error in calculating Tax.

The Federal Tax Authority requested all vendors wishing to register with FTA for the Tax Accounting Software Accreditation to review the requirements and guidelines related to the accreditation on the FTA’s official website and submit the required documents, which include: Software vendor’s name; name of Tax Accounting Software; version number of Tax Accounting Software to be registered; date and validity of the listing; other vendor information (like trade license number, address, etc.); contact details; and the required application form, which can be downloaded from www.tax.gov.ae, duly completed.

The Tax Agent Register Created to meet the requirements of compliance with value added tax, the Tax Agent’s post is a new profession to the local market and is expected to attract high demand from professionals working in accounting and legal services.

WAM

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