VAT in UAE is applicable on the supplies made by a VAT-registered person in the course of business for consideration
Question: We often receive goods/services from new suppliers. How could I verify the status of a Tax Registration Number (TRN) of an entity?
Answer: A user can visit the Federal Tax Authority (FTA) website at https://eservices.tax.gov.ae/en-us/trn-verify to verify the status of any TRN.
Question: I have cancelled my trade license of the company which is VAT-registered. Do I need to deregister from VAT or will it be automatically deregistered? Are there any penalties?
Answer: A company must apply to FTA for VAT deregistration, if:
a)the company ceases to make taxable supplies; or
b)the taxable supplies of the company (in the last 12 calendar months) is less than Dh187,500, subject to certain conditions.
As you have cancelled the trade license of the company, it indicates that the company has ceased to make taxable supplies.
The online application for deregistration must be submitted to FTA made within 20 business days from the end of the month. Any delay beyond 20 business days will attract a monthly penalty of Dh1,000 subject to a maximum of Dh10,000.
Question: My company is VAT-registered and submitting quarterly VAT returns. The company submits the VAT return for the quarters Feb-Apr, May-Jul, Aug-Oct and Nov-Jan. We want the VAT quarters to align with calendar quarters. Could I change the VAT return filing quarters for my company?
Answer: Yes, a company can apply to FTA for a change in VAT return quarters say from Feb-Apr & onwards to Jan-Mar & onwards.
The request can be made through administrative exception application. The application form is available on FTA’s website. A filled-in form should be sent by email to FTA on email@example.com.
Question: My company provides mobile phones to the employees for business use. Any excess and/or personal usage by the employee is recovered from the employee through a salary deduction. The company has not recovered input credit on the mobile phone invoices. Should the company charge VAT?
Answer: VAT is applicable on the supplies made by a VAT-registered person in the course of business for consideration. VAT would be applicable on the supplies for consideration even if input VAT credit is not recovered on the corresponding goods/services.
Recovery from employees would amount to consideration for the supplies. Accordingly, the recovery from employees should be subject to VAT.