Business organisations unfamiliar with the value-added tax system will find navigating financial regulations quite challenging in the UAE. One question that may come to everyone’s mind: Is VAT number same as tax number? The answer is Yes. Therefore, businesses operating in the UAE must fully understand these overlapping tax terms to stay on top of tax regulations.
In this blog post, we’ll discuss what VAT numbers and TR stand for and explain how to acquire them and how businesses can maintain VAT compliance in the UAE.
What is the VAT Tax Number in UAE?
The UAE’s Federal Tax Authority (FTA) provides businesses and individuals registered for tax activities with their exclusive Tax Registration Number (TRN). Once a business or individual completes their registration with the UAE’s VAT system, they receive a unique identifier, which includes 15 digits.
Does the VAT Number represent the Unique Tax Registration Number?
Let’s come to the main point: “Is VAT number same as tax number”?
The UAE employs VAT registration number or tax identification number as synonymous terms, yet this practice creates confusion for businesses that lack understanding of the VAT system.
Businesses receive their TRN as their VAT number once they have completed VAT online registration. All value added tax paperwork, from VAT invoices to credit notes and VAT returns, must display this necessary number.
Why Do You Need a VAT Number in UAE?
The TRN or VAT number is critical for several reasons:
1. Tax Compliance
Businesses in the UAE must obtain and apply their TRN because it is a fundamental requirement for adhering to tax compliance standards. Businesses surpassing the taxable supplies threshold of AED 375,000* must register for VAT to operate.
2. Business Credibility
Businesses receive noticeable enhancements in credibility thanks to registered TRN ownership. The business registration displays to stakeholders its obligation to the UAE tax regulations.
3. Tax Recovery
The primary advantage of registering for VAT is that it lets companies track back VAT payments made for their business expenditures. Through VAT registration, enterprises can reclaim expenses related to purchases and operating costs to lower total taxation requirements.
How to Get a VAT Number in the UAE?
Follow the below steps to obtain a VAT number in the UAE:
Step 1: Check Eligibility for VAT Registration
Examining VAT tax numbers in UAE requirements is an important step for businesses. Companies must register for VAT when they exceed the registration threshold (AED 375,000*) of taxable supplies combined with imports. A business must register for VAT whenever annual revenue reaches this required level.
Step 2: Prepare Required Documentation
According to the VAT laws, you need to provide several documents to the FTA, including:
- A copy of your business’s trade license
- A copy of the Emirates ID or passport of the business owner or authorised signatory
- Business billing information (utility bills or tenancy agreements)
- Bank account details of the business
Step 3: Register on the FTA Portal
The VAT registration form is available online at the FTA’s online portal. Start by setting up an account on the FTA portal to finish the VAT registration application process. Complete your business application by providing relevant financial status details for your company.
Step 4: Submit Your Application
After completing document submissions with the registration form, the FTA will evaluate your application. Online VAT registration application processing from the FTA requires 20 business days.**
Final Words
Knowing is VAT number same as tax number will help you fulfil tax compliance and allow businesses to reclaim VAT expenses on time during their purchases. Moreover, they also use it to establish their business credibility. To obtain their TRN, businesses must register for VAT, including financial information, maintain UAE VAT compliance with tax invoices, and file tax returns with proper documentation.
Do you find day-to-day operations and VAT compliance supervision challenging? Xpert Advisory VAT accounting services simplify VAT registration and filing throughout cross-border transactions. Contact us now to discover how our services will benefit your company!
