UAE's Federal Tax Authority confirm companies only need Tax Registration Number to carry out business

The Federal Tax Authority, FTA, has confirmed that businesses are not required to present a tax certificate in order to conduct their commercial activities and can simply use their Tax Registration Number, TRN.

In a statement issued on Saturday, the Authority called on all businesses and stakeholders in the UAE to carry out commercial or other transactions using TRNs provided by businesses, urging them not to require tax certificates in order to ensure smooth operations and minimise disruption of work.

The Authority stressed that tax registration certificate cannot be printed or downloaded using provisional Tax Registration Number. However, businesses that have acquired their TRN can conduct their business activities normally. The FTA website allows individuals to verify the TRN of any company registered with the FTA for Value Added Tax, VAT, purposes.

The Federal Tax Authority noted that businesses that submitted their registration applications after the deadline set by the Authority last December were given provisional TRNs to allow them to conduct business and comply with their tax obligations. These businesses, however, are required to complete their tax registration and provide the authority with all required documents and rectify any pending errors.

The provisional TRNs are sufficient for conducting business and verifying the legal status and compliance of taxable persons. They do not, however, allow for issuing the tax certificate, which becomes available once the final TRN has been issued. The Authority had issued these provisional TRNs to help businesses comply with tax regulations and to ensure operations are not disrupted.

Over 260,000 companies Registered with Federal Tax authority in UAE

About 260,000 companies have registered for VAT but tens of thousands of others are yet to do so - weeks after the deadline passed.

Khalid Al Bustani, head of the Federal Tax Authority, on Tuesday, urged businesses to get their affairs in order. But he suggested there would be leniency and said no date has been set for the issuing of fines.

Last week, the authority also said companies would be given a few months before they had to file their first tax returns to help ease the burden. Mr Al Bustani could not say exactly how many companies are yet to register, last year about 350,000 would be subject to VAT and had to register before December 4, 2017.

In addition to the 260,000, about 10,000 larger 'groups' of companies have also registered. Online registration for VAT began last September. "In some countries, it takes them up to eight months to register, but with the way things have been going, we believe we will be done soon," he said.

Mr Al Bustani said about 50,000 companies registered in one day last month as the deadline loomed.

When asked when the Dh20,000 fines would be issued, as set out in law, he said: "Our goal is not to fine companies, our goal now is to have everyone register. But whoever avoids registering intentionally will be subject to fines."

Mr Al Bustani said the authority was being flexible and understands that some companies were genuinely not ready yet, however, he said there will be no amnesty period for intentional dodgers and tax evaders.

"In all the other countries that apply VAT, the taxation authority only plays an observatory role, but here the private sector is expecting us to be-be a tax adviser," he said. "We have already done more than our role by providing awareness workshops, and explaining the procedures in detail on the website," he added.

 

Moreover, the authority is in the process of introducing tourist tax refund. The law already includes a clause with regards to tourist refund, however, the process will take time, he said.

The authority has been having discussions with the big four international firms that operate the tax refunding process, and they will be starting a tender soon to decide which firm will take care of the procedure in the UAE. The authority has also received 4,000 applications to register tax agents, out of which 250 have been rejected, he added.

David Daly, a chartered accountant who leads a consultancy practice in the UAE, said he knows of companies that have had their registration forms rejected without a full explanation.

“I know of three entities that have been rejected for reasons of turnover. All believe that they will soon reach the minimum threshold for registration,” he said in reference to the Dh375,000 threshold.

“How is the FTA currently measuring 'soon' by way of accepting an application?”

"When the entities e-mail the FTA they are not getting a response. Ringing doesn't help as individual cases are not entertained, just queries on the law.

"The FTA could support a lot of worried entities by either replying or better, releasing a statement clarifying the requirements for registration."

Tax authority defers date to file returns Vat in UAE

The Federal Tax Authority (FTA) has relaxed the timeline for filing the first value-added tax (VAT) returns, easing reporting and compliance pressure on companies, especially SMEs.

 Earlier, the first tax return filing for companies with more than Dh150 million turnover was one month. For others, it was quarterly. Now, firms can file their first tax returns after four or five months in June as per the new timelines appearing on the FTA's dashboard after log-in by a member company. Such an extension in filing returns shall help firms to better comply.

"Earlier today, we have seen some relaxation by the FTA with respect to the VAT return period. The FTA has provided the first VAT return period from January 1 to May 31 and subsequently on a quarterly basis. This means the first return will need to be filed on or before June 28 and later returns from June 1 to August 31, September 1 to November 30, December 1 to February 28-29," said Anurag Chaturvedi, senior director, Crowe Horwath.

He said all businesses must log onto the FTA's website and check the tax period under their profile. "Some businesses have been given one month and others have been given five months," Chaturvedi said.

Pratik Shah, partner, WTS Dhruva Consultants, said in order to ensure ease of business under VAT, the FTA has relaxed the timeline for filing the first VAT return which would enable many businesses to gear up for the time loss. Businesses can strive to be fully compliant in terms of reporting VAT obligations to authorities.

Most of the micro, small and medium enterprises have been granted five months, four months and so on as their filing period for the first return, Shah added.

"This will enable various entities to cope up with VAT implementation requirements and ensure they do not fall on the wrong side of the legal provisions," Shah observed.

Along with Saudi Arabia, the UAE levied five per cent VAT on goods and services as part of a GCC agreement.

"Now, businesses need to acknowledge that VAT is a business change and not just an accounting change and accordingly utilise this time bonus to streamline all business functions as per the provisions of VAT to ensure business runs in line with policies," he added.

He said the teething issues post January 1, 2018, on day-to-day compliance are slowly settling down.

Chaturvedi believes this relaxation is meant for clubs, charities and associations to make their first return filing easier. "This relaxation benefits taxpayers and allows them more time to administer the business and structure processes to comply with regulations," he added.

Indian passports may no longer be used as address proof

The Indian passport is set to go through a lot of changes, if the proposal of the ministry of external affairs is implemented.

They will no longer be valid proof of address; a Hindustan Times report says. Reason: The current last page with the passport holder's address and the names of the guardian will be dropped. 

What's more, to make immigration and screening more efficient, orange coloured passports may be issued for individuals in the emigration check required (ECR) category.

Surendera Kumar, under-secretary of policy and legal matters at the consular, passport and visa division of the ministry, was quoted in the report as saying that, "The decision to keep the last page of the passport blank has been taken" to protect the details contained.

Though not printed, the details will be saved on official systems and remain accessible for immigration officials and agencies concerned by scanning a barcode present, a report in CN Traveler said.

Apart from this, the ministry is also mulling changing colour of some passports of a specific category. At present, Indian passports are issued in three colours: white for government officers or to those people who visit other countries for the official work of the government; red for diplomats; and blue for all others across two categories - those who require emigration check (ECR) and those who do not (ECNR), the Hindustan Times report says.

Those in the ECR category will have orange passports, Kumar said. This will increase the speed of the process of emigration as the colour of the passport will make it clear whether the emigration check is required or not. In this case too, existing ECR passports will be valid, according to the report.