Guide to Commercial Activities Certificate under VAT in UAE
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Commercial Activities Certificate under VAT in the UAE

Your guide to Commercial Activities Certificate under VAT in the UAE

The economy of the UAE saw positive growth and streamlining since the start of 2018 when VAT was introduced. In the fourth year of the introduction of VAT, the government has shifted the responsibility of issuing the Commercial Activities Certificate to the Federal Tax Authority. The tax agents and tax consultants have welcomed this move as it’s easier to obtain commercial certificates for taxable persons or entities now. Earlier the issuance of commercial certificates was done by the Ministry of Finance. The shift has been welcomed by all as the FTA holds all the details of the corporates and individuals who are registered for VAT. In this article, we will be discussing what is a commercial certificate under VAT in the UAE and how VAT registration UAE can help you in getting a commercial certificate from the FTA.

What does a Commercial Activities Certificate under VAT in UAE mean and why is it required?

A Commercial Activities Certificate is a tool or a document that allows the holders to claim a refund for the VAT expenses that have been paid by them outside the country. This is irrespective of the applicability of the Double Taxation Avoidance Agreements (DTAA). It is also referred to as the certificate of status of a business or a business person and allows the holder of the certificate to claim the refund of advance paid for VAT if any.

In many cases, business transactions that take place outside the UAE require VAT payments to be done in advance. The Commercial Activities Certificate will help the parties involved in such kinds of transactions to claim the refund of the tax that has been paid in advance. In order to get detailed advice on the Commercial Activities Certificate, one must consult the tax agents in the UAE, who can help in obtaining the same easily.

Read also: What are the new VAT Administrative Penalties?

Benefits of obtaining Commercial Activities Certificate under VAT in the UAE

The benefits of Commercial Activities Certificates are mainly there for the businesses who are involved in cross-border transactions.

This is because such certificates help the owners of the certificate to take advantage of Double Taxation Avoidance Agreements (DTAA) as it prevents the incurrence of any repeated tax charges on the supply of the same goods and services.

in addition to this, this certificate also helps in getting a refund of the advance paid for VAT in the international transactions in a country outside the UAE, even when DTAA is not applicable.

One must consult the experienced tax agents in Dubai to guide them through the process of obtaining a Commercial Activities Certificate from the FTA.

Procedure to obtain a Commercial Activities Certificate under VAT in the UAE

The procedure for obtaining a Commercial Activities Certificate is straightforward. The taxable persons of the business entities have to log in on the FTA portal for applying for the Commercial Activities Certificate in the UAE. For this to happen, the applicants (business entities) must have an FTA account to log in to the portal. Those who are not having an account with the FTA, are required to register a fresh account with the help of the tax agents in the UAE.

#1: The first step involves the applicants logging in to their FTA account and then clicking on the link to create the request for the Commercial Activities Certificate on the main dashboard.

#2: Then the applicant needs to fill in all the details asked for the application form and then submit the fees online.

#3: The Commercial Activities Certificate will be issued and the same can be downloaded once the payment is done.

#4: This certificate is password protected and can be opened with the password as instructed in the portal.

The tax agents in Dubai can help the tax registrants in completing the entire process easier.

Documents needed to get a Commercial Activities Certificate under VAT in the UAE

The taxable entities or businesses who have already performed VAT registration in the UAE can only apply for the Commercial Activities Certificate. The documents required while applying for the Commercial Activities Certificate in the UAE are mentioned below-

  1. Tax Registration Number (TRN)
  2. Trade license copy
  3. The request letter signed and stamped by the applicant

The companies and business entities may find it difficult to furnish the documents demanded by the FTA for issuing the Commercial Activities Certificate. Therefore, it is advisable to take the help of the professional tax agents in Dubai, who will help the taxable persons to get their Commercial Activities Certificate without any errors and delays.

How Farahat & Co can help you in obtaining the Commercial Activities Certificate under VAT in the UAE?

Therefore, we understood that obtaining a Commercial Activities Certificate is important for the businesses that are involved in cross-border transactions. This certificate helps the tax registrants to avoid any advance VAT payments on transactions outside the UAE. Expert assistance may be needed for the businesses to obtain the Commercial Activities Certificate. The Farahat & Co can help you out in obtaining the same without much issues and delay. We also provide consultations on various VAT-related matters like VAT registration, VAT return filing, excise tax registration, VAT accounting, compliance checks, VAT health checks, etc. Therefore, get in touch with us today to resolve all your tax-related queries and our experienced staff will guide your way through hassle-free tax-related works.

Read also: What is Excise Tax UAE and its new Amendments?

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions. Read more