VAT registration is essential for businesses meeting specific turnover thresholds, enabling compliance with tax regulations. The process involves two primary steps: an eligibility check and a TRN (Tax Registration Number) application.
1. Eligibility Check
To begin, businesses must evaluate whether they meet the mandatory or voluntary VAT registration threshold defined by the Federal Tax Authority (FTA). For mandatory VAT registration, the annual turnover threshold is AED 375,000, while voluntary registration is applicable for businesses with taxable supplies or expenses exceeding AED 187,500 annually. This step ensures alignment with legal requirements and provides clarity on whether VAT registration is compulsory or optional.
2. TRN Application
After confirming eligibility, the next step involves applying for a Tax Registration Number (TRN). The business must gather and prepare all required documentation, such as:
- Trade licenses
- Financial statements showing turnover figures
- Owner identification details
With these details, the application is submitted through the FTA’s secure online portal. Accuracy and completeness are crucial to avoid processing delays or rejections. Once approved, the TRN enables businesses to legally collect VAT on goods and services and reclaim VAT paid on eligible expenses.
VAT registration not only ensures compliance but also allows businesses to claim input VAT, enhancing overall financial efficiency. Following these steps and meeting the required thresholds contributes to smoother business operations and legal adherence.