Everything You Need to Know About Corporate Tax & VAT

VAT Registration in UAE

UAE will be introducing a 9% federal corporate income tax (CIT) on business profits with a threshold of AED 375,000, effective from the financial year beginning 1st June 2023.

No need to panic, the corporate tax rate in UAE is the lowest in the GCC and is highly competitive at the global level. The corporate tax regime in UAE will follow best global practices and will have easy compliance requirements.

Businesses need to pay corporate tax on the profits as reported in their financial statements. Financial statements need to be audited on time, and there won’t be many exceptions.

Foreign businesses that have already registered for VAT in the UAE need to examine the implications of corporate tax as regards the creation of a permanent establishment (PE), which may lead to corporate tax liability in the UAE. 

Even with VAT and the upcoming CIT, UAE continues to be an attractive foreign direct investment (FDI) destination, the reason being the low rates for both. 

According to the ministry, while CIT is applicable to the mainland, FZEs will continue to be exempted from taxes, provided they align with regulatory requirements and do not engage in business transactions with the UAE mainland. However, FZEs may be required to pay taxes on income generated from mainland operations.

VAT in UAE

Let us now focus on VAT tax registration Dubai. UAE introduced VAT on 1 January 2018 at a rate of 5 percent. Income from VAT is primarily used to provide quality public services.

To register for VAT, the following documents are needed: 

Copy of trade license, Passport copy of business owner and partners, Copy of Emirates ID held by owner and partners, Memorandum of Association (MOA) of the company, Company contact details, Bank account details, income statement for the last 12 months, a statement showing the nature of business and its activities.

Accusafe: your reliable partner for UAE tax services

As the leading accounting and tax consultancy in Dubai, we offer professional advice to businesses and help them avoid penalties due to tax non-compliance.

We offer the best consultancy services related to a VAT registration in Ajman and other emirates of UAE. If you are looking for trusted VAT registration services in Dubai, do contact us. Our tax experts are here to help you.

Tax registration is a complex process that needs to be done with due diligence. Businesses could face penalties if they are not fully knowledgeable about UAE VAT rules, regulations, and compliance requirements. 

Our experts will walk you through VAT implementation and guide you on tax compliance, records management, VAT Registration, VAT return filing, VAT deregistration, and more. With our experts taking care of your VAT and accounting needs, you can focus on the core areas of your business.

Contact Accusafe, UAE’s top consultancy for VAT, Accounting, and Audit services in Dubai, Abu Dhabi, Sharjah, and Ajman.

Tax Registration Number – TRN

TRN is the unique number issued to the tax registrant by the Federal Tax Authority (FTA). TRN is a unique 15-digit number, obtained post-VAT registration in the UAE. Every VAT registrant is obliged to mention the TRN in various documents related to VAT.

We help you get your TRN by submitting your UAE VAT registration application in the proper manner and getting it approved by the FTA. TRN is automatically sent to the registrant after VAT registration is complete. Without TRN, the companies or traders can’t charge VAT.

Why TRN is important? 

TRN is a means to track all the taxable individual and business transactions. It also facilitates communication between the supplier and buyer. The TRN is required when companies claim back the tax paid on the purchase of goods and services. 

Also, having TRN on the Tax invoice enables the registrant to take the VAT credit on its purchases and expenses. Further, TRN needs to be quoted for all communications with FTA, and also in documents related to VAT including Tax invoices, VAT returns, and tax credit notes.

Get your Tax Registration Number (TRN) in UAE

We help you get your TRN. The applicant must file a Tax Registration application with the Authority. The taxable person must log in to the online portal of the FTA and complete the VAT registration, following which he/she will be provided with all VAT-related information.  All the eight sections of the UAE VAT need to be filled out. After submission and approval, the applicant is registered for VAT and the TRN is sent with a certificate. We help you through this process and make it hassle-free.

We can advise you with a VAT applicability assessment and decide the percentage (5%, 0%, or exempt) before applying for VAT Registration. You need to select the business activities without error at the time of registration to get this done correctly. Contact us for a free consultation on corporate tax and VAT today!