VAT Compliance in UAE: Importance of Registration and Filing for Businesses
Compliance with VAT regulations in UAE is mandatory for businesses to avoid legal repercussions and financial penalties. The UAE introduced a 5% VAT on January 1, 2018, applicable to the supply of goods and services. VAT-registered businesses can reclaim the tax paid on purchases and expenses, enhancing their financial health. Without registration, companies pay VAT on purchases but cannot reclaim it, increasing costs. To ensure compliance, businesses must apply for VAT registration and obtain a Tax Registration Number (TRN) before exceeding the threshold. Regular and accurate VAT filing with the Federal Tax Authority (FTA) is crucial to avoid penalties and maintain a positive business image.