The minimum requirement for any business to register for VAT is an annual taxable turnover exceeding AED 375,000. If the taxable turnover falls below this threshold, businesses are not required to register, however, businesses can register voluntarily for VAT purposes. Thus, businesses should seek the services of VAT consultants in the UAE to seamlessly register for VAT and to ensure compliance with the statutory regulation.
VAT Registration Fees in UAE
The applicable VAT registration fee depends on the annual turnover of your business and can range between AED 1,500 and AED 10,000. Smaller businesses with an annual turnover of less than AED 100,000 are usually charged a flat rate of AED 1,500 while larger businesses may have to pay up to AED 10,000 depending on their turnover.
In addition to the VAT registration fees, businesses must also consider the cost of filing and administering their VAT returns. This can vary from business to business depending on the complexity of operations.
VAT-registered businesses in the UAE are required to submit periodic returns (usually quarterly) and provide evidence that they have complied with reporting requirements. Maintenance and preparation of accurate records are essential when submitting returns. Businesses should ensure the maintenance of complete information regarding their sales invoices and purchase documents and correctly record details such as customer/supplier names and relevant tax references to avoid any potential penalties.
VAT Registration Penalties
Not paying the required UAE VAT registration charges results in penalties. Failure to register for VAT and pay the applicable fees within the stipulated time accrues penalties found if proven not to have registered or paid timely.
The Federal Tax Authority (FTA) will impose a penalty of up to AED 20,000 for each type of violation. Furthermore, it may also impose a penalty of up to twice the amount due if the violator has not paid the applicable fees within 30 days of receiving notice from the FTA.
The FTA is also empowered to issue a travel ban if VAT payment is overdue for more than three months. The violator will be unable to leave the country until all dues and fines are paid in full, making it impossible for them to continue their business operations abroad.
Also read: How to File a VAT Return in the UAE?
Consult VAT Consultants in the UAE
Businesses are required to submit their returns on time, and accurately pay their dues in compliance with the VAT regulation to avoid the risk of incurring penalties. Thus, businesses should seek the services of VAT consultants to seamlessly register for VAT and to stay compliant. Therefore, contact us today and we shall be glad to assist you.
