Optional and mandatory registration limitOptional and mandatory registration limit



Optional and mandatory registration limit

1 - Benefit from the beginning of next year will start to apply VAT in the United Arab Emirates and since this tax is one of the most effective tax in terms of collection of funds and the difficulty of evasion, which is indirect tax and borne by the end consumer and given that  tax is known as a tax The chain shall have all the works that fall within the supply chain to register in the network of the employees of the value added tax for the benefit of the business represented by the following: - The tax deduction for some expenses spent in the production of income and for the purposes of work which benefit only the registrar.

2 - Avoid the occurrence of legal irregularities, which will result in serious fines business may not be able to carry the business up to five times the amount of tax due, According to the provisions of the law, there are two types of registration limits, through which any company can register in the network of the employees of the value added tax and benefit from the advantages of The registration are:-

(A) The mandatory registration limit, which is a fixed amount, if it exceeds the value of the taxable supply or is expected to exceed it, then it must register in the taxpayer's network...

The law sets the mandatory registration limit at (375000) AED and this value expresses the value of the total supply and not the value of net profit as some understand.

(B) The optional registration limit, which is a fixed amount, if it exceeds the value of the taxable or taxable expenses, or is expected to exceed it, then the supplier may register in the taxpayer's network (we shall discuss the advantages of the optional registration in the following article).

The law sets the optional registration limit from (18,7500) AED to AED (375,000).

It also gives the law the authority and distinction for some businesses whose all supplies are subject to the zero rate to apply to the Federation of Taxation (FTA) for the purposes of exclusion from registration and in the event of any change in the activity of the taxpayer must correct his status and initiative to register in order to prevent any fines.

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