With the recent rules and regulations of the Federal Tax Authority in place, it has become mandatory for businesses in UAE to get their Tax Registration Certificate (TRC) and become taxpayers as soon as possible. It should be noted, however, that the tax system in UAE requires businesses to be extremely mindful of their actions, therefore, there are a number of factors which must be considered before applying for the TRC. Certain questions need to be answered by businesses in detail, some of the most important ones are listed below:

1. What is a Value Added Tax (VAT)?

Businesses should very well know what they are getting into. Cash is king for a company and tax is all about cash outflows. Back in 2017, the FTA started welcoming all UAE-based enterprises to register for tax, at first registrations were open for Excise Tax only, but later on, by the start of 2018, Value Added Tax (VAT) was introduced and implemented nationwide. Since VAT is a tax that is levied on goods and services, it is a consumption tax and its burden eventually falls on the consumer. So essentially, a business or seller just collects it from the consumer to pay it to the tax authorities.

2. Which businesses are eligible for TRC?

A company which sells those goods and services which are of the taxable nature is supposed to apply for a TRC and become a taxpayer. Moreover, it is mandatory only for those companies that have an annual turnover of AED 375,000 or more. Companies with an annual turnover ranging from AED 187,500 to AED 375,000 are also encouraged to voluntarily register and get their TRC. All in all, businesses should be aware of the fact that in a case where they fulfil the eligibility criteria yet avoid obtaining a TRC, they get heavily penalized by the Federal Tax Authority.

3. Which documents are needed when applying for a TRC?

The application process is totally virtual which means that there is no need for a business representative to be physically present within the FTA premises at any stage. The documents mentioned below need to be collected, scanned and uploaded on the FTA portal when a business decides to obtain a TRC.

• Copy of passport of the business owner(s)
• Copy of UAE ID card of the business owner(s)
• Contact details of the business owner(s)
• Copy of business trade license
• Memorandum of Association (MOA) of the company
• Details of business experience
• Bank details of the company
• Full address of the company including postal address, plus contact details
• Details of company annual turnover, that is, last year’s income statement

Please note that the documents needed for obtaining a TRC might vary depending upon the nature of the business and / or the type of applicant.

4. Do you know about a tax consultant?

Tax compliance is of utmost importance if companies intend to survive in the UAE. That is the main reason why companies need professional assistance throughout the whole process of VAT registration and payment, to be able to avoid making mistakes and being penalized. ACCBOOKS is a trusted firm that, among other things, specializes in providing VAT-related assistance to businesses across the country. Its personnel work closely with the clients and provide them plausible services from start to finish, therefore, it is beneficial for companies to seek guidance and outsource all tax-related tasks to experienced experts of firms like the ACCBOOKS.