Tax Registration Number is Mandatory If Your Revenue is Above Dh375,000

The United Arab Emirates (UAE) is renowned for its progressive policies and business-friendly environment. To streamline operations within the country, the UAE government has implemented the Tax Registration Number (TRN) system.

This system provides a unique identification number for businesses and individuals in the UAE, specifically for tax-related matters. Whether you're a resident, a business owner, or a visitor, understanding how to obtain a TRN number in the UAE. 

This article simplifies everything, from explaining recent updates and implications to helping you apply for a TRN. Let's start clearing up any questions you may have about TRNs in the UAE.

Understanding TRN in the UAE

The Tax Registration Number (TRN) is a distinctive 15-digit identifier designated for businesses and individuals in the UAE for taxation purposes.

It is essential for various financial and business transactions, including Value Added Tax (VAT) processing and tax return filings. TRN is a fundamental requirement for businesses operating in the UAE.

Changes in the TRN Number System

The new TRN system brings about several notable changes to simplify tax-related procedures and increase transparency. The key changes include:

Unified System: The new TRN system aims to unify tax registration across all Emirates, replacing the previous separate registration processes for each Emirate.
Format: TRN numbers under the new system are structured differently, with a unique identification code assigned to each entity or individual taxpayer.
Centralisation: The new system centralises tax registration and management, allowing for easier access to taxpayer information and facilitating more efficient tax administration.

Implications of the New TRN System

The introduction of the new TRN system carries several implications for businesses and individuals in the UAE:

Compliance Requirements: Entities and individuals must ensure timely registration under the new TRN system to remain compliant with UAE tax regulations.
Data Accuracy: Accuracy in providing information during the TRN registration process is crucial to avoid discrepancies and potential penalties.
Integration with Tax Processes: The new system is expected to integrate with various tax processes, including filing returns and payment of taxes, leading to smoother operations and reduced administrative burdens.

Eligibility for TRN in the UAE

The UAE's Federal Tax Authority (FTA) has set a revenue threshold of Dh375,000. If your revenue falls below this threshold, you are not obligated to register for VAT and obtain a TRN.

Documents Required for TRN

To obtain a TRN in the UAE, specific documents need to be submitted. These typically include legal identification documents, trade licences and other relevant business paperwork. Requirements may vary based on your business activities. 

• Steps to Apply for a TRN Number in UAE
• Visit https://eservices.tax.gov.ae and select the Sign-up option.
• Fill out the sign-up form for the TRN number.
• Verify your registered email address via the auto-email sent.
• Log in to your e-service account.
• Click on Register for VAT in your dashboard and proceed through the Getting Started Guide.
• Complete the online form comprising 8 sections, ensuring to provide accurate details.
• Review and apply for approval.

Application Processing Time

It takes approximately 20 business days from the date the completed application was received by the FTA. However, if additional information is needed, the FTA may require more time to process the application.

In such cases, applicants must provide the necessary additional information and resubmit the application.

Verifying Your TRN Number

Verifying your TRN number is crucial to ensure its accuracy and legitimacy. This can be easily done through official UAE government websites or by contacting the Federal Tax Authority (FTA). Verifying your TRN helps prevent issues stemming from incorrect or invalid numbers.

Next Steps After Receiving TRN for Your Company

Upon receiving your Tax Registration Number (TRN) in the UAE, it's crucial to streamline your VAT compliance by:

Updating Tax Invoices: Ensure your invoices comply with FTA's format, including the TRN and other mandatory details.
Updating Records: Incorporate relevant VAT modules into your records to accurately document transactions.
Maintaining Accurate Bookkeeping: Keep meticulous financial records for tax filing and potential VAT refund claims

Checking TRN Number Validity

TRN numbers are subject to validity periods and may require renewal. Regularly checking the validity of your TRN is essential to avoid disruptions in business operations. Promptly renew your TRN if it has expired.

Linking Tax Registration Number with Customs Registration Number (TRN - CRN Linkage):

Option One: Update your customs registration number on your registration profile with the Federal Tax Authority (FTA) by logging onto the FTA’s e-Services portal. Multiple customs registration numbers can be provided by selecting the Edit option and adding the details.
Option Two: Provide the customs department office with your TRN.
The customs department officer can verify the TRN by logging onto the e-Services portal or by visiting the FTA website and by using the feature of TRN verification.

Once the customs department office verifies the TRN ownership, the customs department can update your TRN on the customs department system.

Can You Operate in the UAE Without a TRN?

Yes, it is possible to operate in the UAE without a Tax Registration Number (TRN) under certain circumstances. The UAE's Federal Tax Authority (FTA) has set a revenue threshold of Dh375,000.

If your revenue falls below this threshold, you are not obligated to register for VAT and obtain a TRN. However, once your revenue exceeds this threshold, VAT registration becomes mandatory, and you will need to apply for a TRN accordingly.

It's essential to keep track of your revenue and comply with VAT regulations as per the FTA guidelines to avoid any penalties or legal complications.

VAT De-registration

VAT deregistration in UAE allows a taxable person or a business to cancel their VAT registration and suspend their Tax Registration Number (TRN). FTA VAT Deregistration is an online process.

Who Must De-register for UAE VAT?

A business or individual registered under the Federal Tax Authority (FTA) must apply for VAT deregistration under the following circumstances:

If the business or individual stops making taxable supplies and does not expect to make any taxable supplies over the next 12-month period.

If the business or individual is still making taxable supplies, but the value in the preceding 12 calendar months is less than the Voluntary Registration Threshold (Dh187,500).

If the business or individual is still making taxable supplies, but the value in the previous 12 months was less than the Mandatory Registration Threshold (Dh375,000) and 12 months have passed since the date of registration (if registered voluntarily).

Please note that a person who has voluntarily registered under VAT cannot apply for deregistration in the 12 months following the date of registration. Late VAT deregistration penalties amount to Dh10,000.

Steps for FTA VAT De-registration

• Log in to your FTA VAT portal.
• Navigate to the dashboard and locate the VAT registration section.
• Click on the 'De-Register' button next to the VAT registration.
• Your taxable person details will be pre-populated in the deregistration application.
• Choose the reason for VAT deregistration from the provided options.
• Specify the effective date from which the Taxable Person is required or eligible to deregister.
• Upload all relevant supporting documents by clicking on 'Choose Files'.
• Review and confirm the authorised signatory and declaration section of the application form before submission.

The implementation of the new TRN system in the UAE signifies a significant step towards modernising tax administration and enhancing regulatory efficiency.

Understanding the changes, implications, and application process is essential for all entities and individuals operating within the UAE to navigate the transition smoothly and maintain compliance with tax regulations.

By staying informed and proactive, businesses and individuals can adapt to the new system effectively and ensure seamless operations in the UAE's evolving tax landscape.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.