The introduction of Value Added Tax has significantly impacted the business landscape of the UAE, including Sharjah, one of the seven Emirates. It is a consumption tax applied to the value of a product at each stage of the supply chain. The UAE VAT law has mandated businesses to register for VAT depending on their revenue. Hence, in this blog, we will guide you through the process of VAT Registration in Sharjah, the importance of compliance, and how VAT Registration Services in Sharjah can assist in navigating this legal requirement.
VAT Registration in Sharjah: Introduction
According to the UAE VAT law, being registered for VAT implies that the business is legally approved as a supplier of goods and services by the government and is authorized to collect tax from customers. In addition, businesses registering for VAT can enjoy specific privileges, such as –
- Impose VAT on the taxable supplies
- Claim refund on input tax (VAT paid for purchases)
- File VAT returns periodically
In addition to these facilities, all registered businesses are required to align their reporting structures with the FTA guidelines. For instance, maintain accurate and updated books of accounts, document all tax invoices, credit notes, debit notes, and records of supplies.
Take a step toward transitioning your business into the VAT era with the support of Shuraa Tax specialists.
Types of VAT Registration in Sharjah
VAT registration allows businesses to collect taxes from the consumer and remit them to the government. Further, they can claim VAT on eligible purchases from the Federal Tax Authority (FTA), the governing body regulating taxes in the UAE. Registering for VAT validates that the business is compliant with the UAE tax laws. However, the registration criteria will depend on the annual revenue of the business.
Mandatory VAT Registration – Businesses in Sharjah that have annual sales exceeding AED 3,75,000 need to conform with the legal tax guidelines of the UAE and undergo Mandatory VAT Registration. Failure to register can lead to penalties and other legal consequences.
Voluntary VAT Registration – Businesses with annual revenue between AED 1,87,500 and AED 3,75,000 can voluntarily register for VAT, although it’s not mandatory. However, by registering with the FTA, businesses can collect VAT from their clients and reclaim the VAT paid on purchases. This can help in enhancing their cash flow and reduce expenditures.
Benefits of VAT Registration in Sharjah
There are numerous benefits of registering for VAT in Sharjah –
Legal compliance: VAT registration in Sharjah helps businesses comply with UAE tax laws. Failure to comply can expose businesses to unwanted penalties. Hence, adhering to the laws can help avoid these unforeseeable risks and ensure financial prosperity and business reputation.
Financial management: Compliance with the VAT regulations promotes a culture of financial documentation and record-keeping. Under the UAE VAT law, businesses are required to maintain precise records of all VAT-inclusive transactions. This practice not only enables accurate tax reporting but also ensures better cash flow and transparency in organizations.
Government benefits: VAT registration enables businesses to take advantage of various government incentives, including tax refunds. This benefits businesses by reducing their overall tax liability.
Credibility: Businesses that are registered for VAT signify that they are reliable and compliant with the FTA guidelines. This feature of theirs makes them more appealing to customers and investors.
Access to new opportunities: Large organizations and government corporations usually prefer VAT-registered enterprises. Hence, fulfilling VAT obligations without any negligence and delays can invite more lucrative contracts and partnerships for the enterprise.
VAT registration procedure in Sharjah
The Federal Tax Authority provides 24/7 service for businesses to complete the VAT registration in Sharjah. The process goes as below:
Determine the eligibility for registration –
First and foremost, the business owner needs to determine whether their business is eligible for VAT registration, depending on their taxable income for the previous year. If their income crosses the specified limit as per the UAE VAT rules, then they must register for VAT. If it is less than the defined threshold, then they can opt for voluntary registration.
Gather the necessary documents –
Before you get into the registration process, make sure you have all the necessary documents ready. For instance, the trade license copy, Emirates ID copy, passport copy, financial statements, and others.
Create an FTA account –
Visit FTA’s e-services portal to create an account. You need to provide your email address and set up a username and password. Confirm the registration via the provided link.
Log in to the portal –
Once your e-services account is created, use your credentials to log into it. Start the registration process by filling in the VAT registration form with the requested details, such as trading name, trade license number, business activity, bank account details, financial information, and other supporting information. Check the input details for accuracy and make sure that all the mandatory fields are completed. Attach the required documents and submit the application.
Wait for FTA approval –
Upon submission, the FTA will review your application and approve the request accordingly. The applicant will receive an email of confirmation on their registered e-mail address. In case, the FTA requires any additional information or documents, they will contact the applicant.
Receive the registration certificate –
If the VAT registration application is accepted by the FTA, it will issue a registration certificate that will include a Tax Registration Number (TRN), and the Date of Registration.
The VAT registration certificate can be further used for diverse purposes, such as –
- Evidence of VAT registration
- Issuing invoices
- Claiming VAT refunds
- VAT audits and inspections
- Updating business records and licenses
- VAT-related transactions
Shuraa Tax specialists will walk you through the process in detail and help you secure your VAT registration certificate without any interruptions.
Requirements for VAT registration in Sharjah
Businesses applying for VAT registration are required to submit certain necessary documents to the FTA. These documents are pivotal to proving the legitimacy, financial position, and eligibility of the business. Below given is the list of documents required for this process:
- Trade license –
- Emirates ID/Passport copy –
- Financial statements –
- Details of bank account
- VAT registration form
- Proof of business activities
- Customs registration number
- Calculation sheet
- Revenue forecast
- Declaration of monthly turnover
- Article of association/partnership agreement
- Certificate of incorporation
- Ownership information
- Power of attorney
Consequence of non-compliance
Non-compliance with the VAT laws in Sharjah can lead to several grave consequences, both legal and financial. For example,
- Monetary fines
- Legal actions
- Restrictions in business operations or activities
- Additional penalties for overdue
- Reputational damage
VAT Registration Services in Sharjah
The comprehensive suite of VAT services offered in Sharjah includes in following:-
- VAT registration
- VAT return filing
- VAT accounting
- VAT reclaims
- VAT de-registration
- VAT payments
- VAT calculation
- VAT compliance
- Regulated tax agent services
Choose Shuraa Tax to fulfill your VAT obligations
By choosing Shuraa Tax Consultants and Accountants, you can avail professional guidance and support to meet the unique requirements of VAT compliance for your business in Sharjah or anywhere in the UAE. The VAT experts of Shuraa are well-versed in the UAE VAT laws and thus, can ensure that the registration process is smooth, precise, and fully compliant with the guidelines of the tax authorities. Moreover, they guarantee that your business stays protected from any potential risks or errors during the process.
Their ongoing support services include VAT return filing, advisory services, and continuous updates on VAT laws. Contact Shuraa Tax today to learn more about VAT Registration Services in Sharjah.
