What is VAT?
VAT (Value Added Tax) is a type of general consumption tax that is imposed on goods and services. The GCC states have agreed to implement VAT to reduce dependence on oil revenues. The consumers in UAE are likely to pay 5% VAT while purchasing goods and services.
FTA portal opens for online VAT registration
The Federal Tax Authority (FTA) in UAE has now opened its online portal to VAT registration purposes. Deadlines are drawn for the application of VAT registration based on the annual turnover by the Federal Tax Authority.
The companies eligible for VAT registration will require creating an online on FTA and filling up the form.
The relevant application dates for VAT registration are mentioned below:
- The companies with annual revenue surpassing AED 150 million should register before 31st October 2017
- The companies with annual revenue surpassing AED 10 million are urged to register before 30th November 2017
- The other companies have to submit their application for registration before 4th December 2017
Fees and Fines for VAT registration
Fees for services provided by the FTA
| Services | Fees |
|---|---|
| Tax registration services and issuance of an electronic tax registration certificate | Free of charge |
| Attested paper registration certificate | AED 500 |
| Registration and renewal fees for tax agents | AED 3,000 (for 3 years) |
| Registration and renewal fee for an accounting software provider | AED 10,000 (for 1 year) |
| Registering a designated zone | AED 2,000 (for 1 year) |
| Issuing an official printed warehouse keeper certificate | AED 500 |
The UAE ministry has announced penalties for violation of tax laws.
| Description of Violation | Penalties |
|---|---|
| Failure to maintain required records and documents | AED 10,000 (First time) & AED 50,000 (Repeated offence) |
| Failure to display prices inclusive of excise tax | AED 15,000 |
| Failure to meet designated zone regulations | 50,000 or 50% of tax |
| Failure to submit a registration application within the timeframe specified by a taxable person | AED 20,000 |
| Failure to submit tax return within the timeframe specified by a taxable person | AED 1,000 for the first time. AED 2,000 in case of repetition within 24 months. |
| Failure of the Registrant to submit a deregistration application within the timeframe specified in the Tax Law | AED 10,000 |
| Failure to submit data in Arabic when asked | AED 20,000 |
| Failure to provide price lists for the excise goods | AED 50,000 |