UAE VAT Registration vs. India GST Registration: A Comparison

Introduction:

The landscape of taxation and regulatory compliance varies significantly across different countries, and two prominent taxation systems in focus are the UAE Value Added Tax (VAT) and India’s Goods and Services Tax (GST). Understanding the intricacies of VAT and GST registration is crucial for businesses operating in these regions. This article provides a comprehensive analysis of the registration processes under UAE VAT and India GST, highlighting the key distinctions and requirements that businesses need to navigate. By comparing and contrasting these two tax systems, we aim to offer a clear perspective on the complexities and nuances of VAT and GST registrations.

As per Articles 13 to 19 of the UAE VAT law issued Federal Tax Authority (“FTA”) which lays down guidelines for businesses to register under UAE to pay taxes to the government. In this write up we are going to understand who is required to get registered, when how etc.

Part-1: UAE VAT Registration

Registration under UAE VAT can be understood by dividing the same into below categories: –

1. Mandatory Registration

• Person:
  • Place of residence in the State
  • Place of residence in implementing State
  • No place of residence but is doing business where no other person is authorised to pay on its behalf
• Value of supplies: 3,75,000 AED
• Time limit: Past 12 months/ will exceed in next 30 days

2. Voluntary Registration

• Value of supplies: 1,87,500 AED
• Time limit: Past 12 months/ will exceed in next 30 days

3. Non-resident Registration

Mandatory registration where the imports are liable to be taxed irrespective of the value of supply.

4. Tax Group Registration

• conditions to be considered as Tax Group:
  • Person: Two/more related parties
  • Place: Place of establishment/fixed established within State
  • Control over one another
• Suo-moto/ by authorities
• Authorities may accept the application or deregister upon request
• Only one TRN is allowed which implies either to be considered as Tax Group/Individual
• Amendment to Tax Group upon application to authorities

5. Governmental Bodies Registration

Under two instances the government bodies shall be liable to be registered and until a cabinet discussion to cover the same is issued they cannot be deregistered:

• Activities undertaken in a non-sovereign capacity
• Activities in competition with private sector

Below are exceptions to business getting registered: –

• Where a taxable person is supplying only zero-rated supplies
• Where a person is covered under clause 1 i.e., registered as Tax Group

Where a taxable person becomes liable to be registered but fails to report than the authority shall recover the tax due along with penalties.

De-registration under UAE VAT:-

In following two scenario the taxable person may apply for deregistration: –

• No taxable supplies or taxable supplies less than voluntary registration in the past 12 months
• Value of taxable supplies is less than mandatory registration within past 12 months

Below method is to be used to arrive at value for computing threshold for registration:-

In order to arrive at the value to be considered as mandatory or voluntary following needs to be considered: –

1. Value of taxable goods & services (including zero-rated supplies)
2. Value of goods & services imported which shall not be exempt i.e., concerned goods & services
3. Value of taxable supplies by way of acquisition of business by another person
4. Value of taxable supplies by related parties (refer executive regulation)

Note: Penalty in case of late registration is 10,000/- AED 

Part-2: Steps for UAE VAT Registration

Below is the step-by-step guide to register a taxable person under VAT: –

Information requirement list to prepare for registration under VAT are listed below:

About the applicant

1. Type of person: legal/natural/other-specify
2. Trade license: If a person holds any license, they need to specify the details of the same
3. Mandatory/Voluntary registration: Refer taxable person guide to calculate, if covered
4. Details of existing TRN under excise
5. Name of applicant
6. Legal name (in Arabic & English)
7. If any trade name, please mention (in Arabic & English)

Details of applicant

1. Trade license details along with copy of trade license
2. Certificate of incorporation (“COI”), if any than attach the copy of same
3. Details of manager as per trade license. If not assigned mention the name of CEO/equivalent person (in Arabic & English)

Contact Details

1. Address
2. Emirate
3. Phone number with country code
4. Email address
5. Preference of language

Banking Details

1. Details of bank in UAE opened. In case the same is yet to be opened details of application submitted with bank for opening.
2. Ensure the bank allows e-Dirham facility as payment under VAT is to be done online.

Business Relationship

1. Details of senior management currently involved in any business in UAE
2. Details of senior management who was involved in past in any business in UAE

If the answer to above is yes, details of trade license along with copy of the same.

About VAT registration

1. Select primary activity from drop-down
2. Add other activities not covered in drop-down
3. Details of turnover in past 12 months & 30 days along with documentary proof. Wherein, details of exempt supply and import paid by other party is not to be included
4. Details of expenses in past 12 months & 30 days along with documentary proof
5. Details of exempt supplies to be undertaken such as financial services, residential building other than first supplies, bare land or local transport services
6. Details of export/import within GCC/outside GCC states along with documentary proof
7. Details of custom registration undertaken along with documentary proof
8. If covered under exception such as exports, international transportation services, aircraft/vessels, investment in precious metals, buildings, oil & natural gas, educational services and healthcare services

Declaration

1. Details of authorised signatory
2. Proof of appointment
3. Mode of communication-email/phone
4. Language of communication-Arabic/English

Note: Document to be uploaded in pdf, jpg, png or jpeg with maximum 2MB size. 

Part-3: Comparison with India GST Registration

In order to draw comparison with the Goods and Services Tax (“GST”) registration in India, please find below the tabs required GST law:-

Similar to VAT, under GST the taxable person is required to register upon crossing the threshold limit or in case of voluntary or other parameters achieved for registration.

The following comparison is tabulated below for ease of reference:

GST	VAT
Business Details	About the Applicant/Details of Applicant
Promoter/Partners	Contact Details/Declaration
Authorised Signatory	Declaration
Authorised Representative	Declaration
Principle Place of Business
Additional Place of Business
Goods and Services	About VAT registration
Bank Accounts	Banking Details
State Specific Information
Verification	Declaration

Conclusion:

In conclusion, the registration processes under UAE VAT and India GST underscore the importance of adhering to tax regulations in each jurisdiction. While both systems share common objectives of revenue collection and compliance, they differ in the level of detail and specific requirements demanded from businesses. The UAE VAT process focuses on turnover and taxable supplies, whereas India GST delves deeper into the specifics of business locations and state-specific information.

Understanding the distinctions and commonalities between these two tax systems is paramount for businesses seeking to expand their global footprint. Compliance with VAT and GST regulations ensures smooth operations, minimizes the risk of penalties, and fosters a transparent and accountable business environment. By staying informed about the unique features of VAT and GST registration, businesses can confidently navigate the complexities of taxation in the UAE and India, contributing to their success in these diverse markets.