Tax Registration Number (TRN)

Tax Registration Number (TRN) is mandatory in order to start taking VAT. Federal Tax Authority (FTA) wants the following elements to be essentially mentioned on the bill/invoice/receipt, that is the amount paid as Value Added Tax (VAT) and also the Tax Registration Number (TRN) of the company. The invoice will be known as ‘Tax Invoice’ as per the VAT law in UAE.

A tax invoice must include the name and address of the company. An invoice must have a tax invoice number or a unique number and date of issue, which enables identification of the tax invoice and the order of the invoice in any sequence.

Do not pay Value Added Tax (VAT) if your bill or invoice does not have these elements. If the Tax Registration Number (TRN) is not mentioned on the tax invoice then businesses will not charge VAT. This is the VAT law in UAE.

Implementation of VAT in UAE on businesses

Businesses will be responsible for carefully maintaining VAT Accounts, costs and associated VAT charges.

Registered businesses in UAE will charge VAT to all of their customers at the prevailing rate and incur VAT on goods and services that they buy from suppliers. The difference between these figures will be reclaimed or paid to the Federal Tax Authority (FTA).

Taxable businesses collect the amount on behalf of the government; consumers will pay the VAT in the form of a 5 per cent increase in the cost of taxable goods and services they purchase in the UAE.

VAT-registered businesses generally:

• must charge VAT on taxable goods or services they supply
• may reclaim any VAT they have paid on business-related goods or services
• keep a range of business records which will allow the government to check that they are following the laws and rules of the government.

Businesses which are registered under the VAT must report the amount of VAT they have charged and the amount of VAT they have paid to the government on a regular basis (as per the dates mentioned on their VAT Certificate i.e Monthly or Quarterly). VAT Return submission will be done online.

If they have charged more VAT than they have paid, they have to pay the difference to the government. If they have paid more VAT than they have charged, they can reclaim the difference.

According to the FTA (Federal Law No. 7-of-2017 on Tax Procedure, ‘A Person may appoint an FTA Tax Agent to act in his name and on his behalf with regard to his tax affairs before the Authority, without prejudice to that Person’s responsibility before the Authority.’

Xact is equipped with a team of thriving VAT specialists who can help your business to overcome expected roadblocks such as lack of familiarity with VAT rules & regulations, structure and compliance issues, lack of resources and lack of a compliant accounting system. Xact Auditing is offering best VAT services in Dubai.