All you need to know about registering for VAT?
According to the executive regulations on value added tax (VAT) published last week, the mandatory registration threshold is AED 375,000.
This means that anyone with a turnover of AED 375,000 or more is required to register their business for VAT, the Federal Tax Authority (FTA) and Ministry of Finance (MoF) said in the recently release regulations.The voluntary registration threshold is AED 187,500, with companies of that size or above able to register for VAT too.
The failure of a taxable person or business to submit a registration application within the time frame specified in the tax law is liable for a AED 20,000 fine. Also according to the executive regulations, companies are able to register as a tax group.
Through this mechanism, more than one company can register for VAT as a group, under a single common control. The main benefit of group registration is to simplify the procedures and save costs through consolidated tax returns and a single VAT registration. The group’s tax returns and payments are carried out by the member who acts as a representative of the group, the FTA has stated. All the members are jointly liable, however.