Registration of VAT mandatory and voluntary for companies in Dubai

Value Added Tax (VAT), considered an all-purpose consumption tax, is imposed on the supply / goods and services of the conventional corporations. A VAT advisory company in the UAE is recommended to do business within a legal framework.
For whom VAT registration is mandatory
In the last one year, companies and individuals who have access to their taxable supplies are allowed to apply for VAT registration if the supplies are more than AED375,000 in the preceding 12 months. This assumes businesses will charge Value Added Tax (VAT) on their sales (output VAT) but can recover any VAT incurred on their purchases (input VAT).
When your company has a turnover that falls below the required threshold for VAT registration, you do not have to apply for VAT. Only filing for VAT means you don’t have to distinguish the VAT in the records on transactions or sales. You should not charge VAT on your company’s revenue. It can, at first, seem like good news. But let us tell you the specifics to convince you it isn’t.
If a company falls below the required threshold, it must take careful account of the costs involved in VAT accounting over not accounting for VAT. Business owners must note, however, that the presumption of proof for trading below the threshold falls on the company, but not on the VAT. Hence, holding well-kept accounting records to show the company has not yet crossed the threshold.
Voluntary VAT enrolment advantages
Scheduling: A minimum tax of 500 Dhs would be imposed on your company up to five times the amount of VAT payable for the duration if your income exceeds the threshold yet VAT is not yet recorded. And by the time the cap is hit, your company will have the VAT registration process installed, which is one less thing to think about.
Company Stability and Cash Flow: Small and large companies that are legally mandated to register as VAT vendors need their suppliers’ VAT invoices to satisfy strict record-keeping standards. Because of this, they can decide not to trade with companies that have not registered as VAT vendors so they can streamline reporting processes.


Refunds: If you supply zero-rated goods / services at the end of the reporting period you may qualify for a tax refund. Education, health care, real estate and land, oil and gas, transportation, and precious resources fall under the zero-rated range. Under the law stipulation there are different provisions for each of these fields.

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