Understanding the VAT Tax Number in UAE



Imagine you're setting up a new business in the bustling heart of the UAE. You've got your business plan, your location, and your products or services all lined up. But there's one critical piece you can't overlook – the VAT Tax Number. This seemingly small detail is a game-changer, ensuring you stay on the right side of the law while adding a layer of professionalism to your operations.

In this guide, we’ll break down everything you need to know about obtaining and using a VAT Tax Number in the UAE, making the process as smooth as a well-brewed cup of Arabic coffee.

What is a VAT Tax Number?

A VAT Tax Number, also known as a Tax Registration Number (TRN), is a unique identifier issued by the Federal Tax Authority (FTA) to businesses registered for VAT in the UAE.

This number is essential for all VAT-related transactions and must be included on all VAT invoices.

Read more: What are the recent UAE amendments to the VAT for e-commerce?

Importance of the VAT Tax Number

Compliance: Ensures your business complies with UAE VAT laws.

Credibility: Adds credibility to your business, showing that you are a registered and tax-compliant entity.

Transparency: Facilitates transparent transactions with clients and suppliers.

Tax Recovery: Enables businesses to recover VAT paid on purchases and expenses.

How to Obtain a VAT Tax Number in the UAE

Step 1: Determine Eligibility

Before applying, ensure your business meets the eligibility criteria:

Annual taxable supplies and imports exceed AED 375,000.

Optional registration for businesses with supplies between AED 187,500 and AED 375,000.

Step 2: Prepare Required Documents

Gather the necessary documents:

1. Trade license
2. Emirates ID and passport copy of the owner/partners
3. Proof of address
4. Bank account details
5. Financial statements

Step 3: Register on the FTA Portal

• Create an Account: Visit the FTA e-portal and create an account.
• Fill out the Registration Form: Complete the VAT registration form with accurate details.
• Submit Documents: Upload the required documents as specified.
• Receive TRN: After verification, you will receive your VAT Tax Number.

How to Find a Company’s VAT Number

To find a company’s VAT number, you can check the official VAT invoices issued by the business or visit the FTA’s official website, where registered businesses are listed.

Maintaining VAT Compliance

Once registered, businesses must comply with ongoing VAT requirements:

Issuing VAT Invoices: Ensure all invoices include the VAT Tax Number.

Filing VAT Returns: Regularly file VAT returns through the FTA portal.

Record Keeping: Maintain accurate records of all VAT transactions for at least 5 years.

Common Challenges and Solutions

Challenge: Errors in VAT registration details.

Solution: If you need to update your VAT registration details, you can do so through the FTA portal by accessing your account and selecting 'Change' to update the necessary information.

Example: Calculating VAT

If your business sells goods worth AED 1,000 with a 5% VAT rate, the VAT amount will be AED 50. Thus, the total invoice amount will be AED 1,050. This amount needs to be reported in your VAT return.

What are Goods and services under VAT? 

Frequently Asked Questions (FAQs)

- How long does it take to get a VAT Tax Number?

The FTA typically takes 20 business days to process a VAT registration application.

- Can I operate without a VAT Tax Number?

No, businesses that meet the VAT registration threshold must obtain a VAT Tax Number to operate legally.

- What are the penalties for not having a VAT Tax Number?

Businesses operating without a VAT Tax Number may face heavy fines and penalties from the FTA.

- How can I verify a VAT Tax Number?

By entering the number in their verification tool, you can verify a VAT Tax Number through the FTA’s official website.

- Can a VAT Tax Number be canceled?

Yes, if your business no longer meets the criteria for VAT registration, you can apply for de-registration through the FTA portal.

Read more: How to Navigate the UAE's New Corporate Tax Law.

Understanding and obtaining a VAT Tax Number is a fundamental step for businesses in the UAE. By following the proper steps for registration and compliance, businesses can ensure they operate within the legal framework, maintain credibility, and benefit from tax recoveries. For more detailed information, always refer to the Federal Tax Authority's guidelines and resources.