The Federal Tax Authority (FTA) has urged businesses to sign-up for VAT as soon as possible to avoid fines for late registration, with little over a month before the levy is introduced on January 1.
The authority said on Wednesday that applications for a Tax Registration Number (TRN) – a requirement for all businesses whose taxable supplies and imports of goods and services exceed Dh375,000 over the previous 12 months – may require up to 20 working days to process.
“Therefore, and in order to ensure that the application is processed – and the TRN issued before January 1, 2018 – the FTA urges businesses to complete their registration to avoid the administrative penalty of Dh20,000, as well as additional penalties related to late payment of tax,” the authority said.
The reminder comes after the UAE’s cabinet on Monday approved the executive regulations related to the country’s VAT law.
The UAE and Saudi Arabia are the only two countries in the GCC to introduce VAT – charged at 5 per cent - on January 1, despite all six members agreeing to do so. None of the four other countries have passed laws related to VAT, as required under the GCC-wide framework agreement signed earlier this year.