What is a VAT number? How to register for VAT in UAE?

Vat registration and VAT number

With the coming of VAT in the UAE the need to understand VAT thoroughly is becoming a necessary part as even if people might know VAT they still are not completely aware of it and how it works. VAT registration and VAT number are the two things that the people might not be entirely aware of and might require a complete explanation on these topics.
VAT is a value added tax that gets added in every stage of the process that a product or service goes through to reach the ultimate buyer. It will be implemented on 1st of January in UAE at the rate of 5 percent to help the government increase their revenue and help in better economy as the revenue had crossed the margin and this is was the way to sort out the matter. In order to be able to pay VAT the companies will have to register with VAT and the VAT number will be used as an identification number for a particular country.

What is a VAT number?

A VAT number is the registration number known as VAT ID that comes in an alphanumeric number which has up to 15 characters that are unique for any corporate body. It is used as an identification for the VAT registered business to identify the details of the entity. It varies from country to country and VAT number can be verified online. The first step to learning about VAT registration and VAT number is to learn VAT itself.

Who can or will be able to register in VAT?

After the news that the VAT will be implemented in UAE by next year on the 1st of January the need for VAT Registration and VAT number is going to be compulsory with no further questions. However, it may not be for everyone, hence, here is the list of who can and who will have to register for it.
The compulsory registration for VAT are for the business who have a revenue over Dh375,000, as per the Ministry of finance. When it comes to businesses whose revenue of below Dh375,000 but over Dh187,500 will have an option to register.
The business that comes under non essential commodities will have to register for VAT which will exclude essentials like food, health care and hospital and school bills. The importers and re-exporters will also be attracting VAT along with home sellers, home buyers and commercial tenants.

When should a business start registering with VAT?

The registration for VAT started on October 1st of 2017 that is three months prior to the date of launching which is on January 1st of 2018. As it is a compulsory rule it will be best to heed to the notice and start your registration today without further delay.

What is the procedure for registering with VAT?

As per mentioned, please keep in note that it is mandatory for businesses whose threshold are Dh375,000 and above and is voluntary for below this amount up to Dh187,000.
The VAT registration can be easily done online in the online portal provided by the Ministry of finance that is known as eservices.mof.gov.ae. It is available for an individual, a company and any other commercial authority. The procedure for all the entities is of similar type, hence, there will ensure not much difficultly in registering except for the types of documents that will be required depending on who is registering and for what you are registering.

What are the documents needed for VAT Registration?

The documents required for every individual and business will differ from one another. One thing that comes common for all is the proof of business and a letter signed by an individuals or an authority of a business. The VAT registered business will require to follow retain records. It will be monitored to the people concerned by the authorities who will monitor the details of the business records and transactions.
Documents that are required for every VAT registration are:
If it is an individual applying for VAT registration
• Request letter signed by the applicant
• A photocopy of the passport of the applicant
• A valid permit of residence
If it is an authority that is registering for VAT
• Request letter signed by the authorized signatory
• A copy of the decree
• A copy of the act of incorporation
If it is a company applying for VAT registration
• A request letter duly signed by the company
• Auditor photocopy of the valid trading license
Before the submission of all these documents an applicant must register online and clear the fee for registration. After the online work is completed one can submit the documents and once this process is completed the authority will issue the VAT certificated once all the procedures are ticked off.

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