Things to keep in mind for the VAT registration process

 If you've been thinking about taxes in recent news, and you don't have a VAT number for your business yet, it's important to keep an eye on whether or not you meet the registration threshold. In UAE VAT, companies whose annual turnover exceeds AED 375,000 's mandatory registration threshold and AED 187,500 's volunteer registration threshold are allowed to apply for VAT registration. Businesses therefore need to understand what type of supplies are considered in deriving annual supply turnover and how to calculate VAT turnover for UAE registration. Below are some important tax tips you should remember if you're a small business owner. These specifics may not apply to you if you are outside the UK, but many VAT systems operate in a similar manner

What is the VAT Registration?

VAT return filing is made compulsory and important for all those manufacturers that are solely involved in the manufacturing process of goods and services. But the sales tax is only charged once when the end-user buys the goods or services. On the other hand, VAT is charged at different production levels, and is therefore called a multipoint tax.

In UAE, companies whose turnover exceeds AED 375,000 have to apply for VAT registration mandatory. The Federal Tax Authority (FTA) has opened its online VAT registration portal to facilitate the businesses' registration. The deadlines based on the turnover of businesses are already announced by FTA and the registration will be carried out in a phased manner. While determining their obligation towards VAT registration is crucial for businesses, it is also important for businesses to know how to apply for VAT registration and to understand the level of details required to complete the online registration procedure.

Process of VAT registration

The basic steps required to register with VAT are as follows:

The application for VAT registration must be filled out with complete information and then submitted to the local VAT office together with all the documents required for VAT registration.

After submitting the request and the documents, the local VAT office shall conduct an inspection of the company's premises within three days of submitting the application form.

After the local VAT office has done the inspection, the relevant deposit fee must be paid.

The TIN number will be allocated after payment of the relevant VAT registration fee and the VAT certificate b within one day

Benefits of VAT registration

Set off- The Company can easily set the difference in VAT given to the supplier and the VAT received by the customers from the company. VAT must only be paid once to the Government for a product. So if the company has already paid VAT, then it can deduct it from what was given to the company by the customers.

Clear corporate image- VAT registration is mandatory, which gives a clear picture of the company and helps to define its image as an established company.

VAT refund- VAT registration makes the company eligible for VAT refunds, which, if the company has purchased any assets from them, it can claim against taxes paid in European countries.

VAT status- Once the company has completed its VAT registration, it helps the company check its VAT status online using the company's VAT number only. The benefit the company gets is that there is no hassle going through all the company's documents and receipts to check when VAT has been paid in advance.