Should I register VAT when I apply for Trade License?

Should I register VAT when I apply for Trade License?

Vat and trade license are separate processes. You need to register for vat if your turnover is more than aed 375,000.

Yes, when you apply for a trading licence, you should register for VAT. You can register for VAT if you wish to be able to claim VAT on certain business expenses as well as road tax if you intend to drive a vehicle for business purposes.

In the UAE, registering for VAT (Value Added Tax) is a separate process from obtaining a trade license. While you can apply for a trade license to operate your business, whether or not you need to register for VAT depends on your business’s annual turnover.

As of my last knowledge update in September 2021, businesses with an annual turnover exceeding a certain threshold (typically AED 375,000 or more) were required to register for VAT.

Applying for a trade license and registering for VAT are two separate processes. You are not required to register for VAT when you apply for a trade license. However, if your business meets the criteria for mandatory VAT registration, such as having taxable supplies and imports that exceed AED 375,000 per annum, you will need to register for VAT with the Federal Tax Authority (FTA) regardless of whether or not you have a trade license. 

Yes, you should register for VAT when you apply for a trade license. If you want to reclaim VAT on eligible business expenses and road tax if you plan to operate a car as part of the business, you may also register for VAT.

Yes, when you file for a trade licence in the UAE, you are liable to register for VAT. If your company's yearly taxable revenue exceeds the mandatory registration threshold of AED 375,000,  you must register for VAT. Therefore, you must register for VAT in UAE before applying for a trade licence, especially if you anticipate exceeding this threshold.