A critical first step for Amazon sellers doing business in the United Arab Emirates (UAE) is to register for VAT (Value Added Tax). To ensure accountability, transparency, and equitable taxes, the government has made VAT registration for Amazon Sellers in UAE mandatory for companies.
Amazon sellers need to adhere to the rules established by the Federal Tax Authority (FTA) and take care of their tax duties in the UAE by registering for VAT. Similarly, VAT is also applicable for Ecommerce sales in UAE, Social Media Influencers, etc.
An overview of the VAT registration procedure and the advantages of complying with VAT in the UAE market are provided in this article.
VAT for Amazon Sellers in UAE
All Amazon Sellers in UAE are mandated to register for VAT then prepare & submit VAT invoices to the Federal Tax Authority (FTA) and file the tax returns. Severe penalties, such as fines and other punishments, may be imposed for failure to comply with these standards.
Companies may find the procedure of registering for VAT in the UAE to be challenging. To ensure easy registration and compliance with VAT norms and rules, business owners must seek assistance from skilled UAE tax consultants. Now let's see how the process is done.
VAT registration for Amazon as an international seller
If you are a non-UAE resident or an international seller selling items located in the UAE to a UAE consumer, you must register for VAT regardless of the amount of turnover from such sales. Before making any UAE transactions, international sellers who do not have a UAE trade license must register for VAT registration.
VAT registration for Amazon as a domestic seller
For Amazon as a domestic vendor, VAT registration is dependent on the turnover threshold. If you are a UAE resident who holds a UAE company trade license and sells on Amazon, you may be asked to voluntarily register or be obliged to register mandatorily.
Steps for the VAT Registration for Amazon Sellers in UAE
For Amazon VAT Registration for UAE Sellers, as a taxpayer, you can directly
- Visit the official FTA's EmaraTax website, complete the forms, and submit the relevant documents, which include a copy of the commercial license and a passport or Emirates ID that is valid.
Here is how you register for VAT in the EmaraTax portal
- The FTA will provide a Tax Registration Number (TRN) upon successful registration to verify your company's VAT status.
- To file VAT returns quarterly basis, use the e-Service portal. Give specific details on the revenue, output VAT, and expenses of your business.
- The FTA will review the provided data and, based on their findings, issue a quarterly VAT certificate.
- Keeping accurate and current records of financial transactions and other business activities is required.
VAT Registration Threshold
A UAE-based Amazon company must register for VAT if its total taxable supply and imports exceed AED 375,000. To avoid penalties for late registration, you must meet this threshold. It is advised that businesses obtain advice from qualified tax consultants to guarantee compliance.
VAT registration offers several benefits that include:
- Legal Compliance: Through Amazon VAT Registration, businesses can be confident they are in compliance with all laws and regulations in the UAE and stay clear of fines.
- Improved Reputation: VAT registration shows a dedication to openness and compliance, enhancing the company's standing.
- Increases Credibility: Credibility is boosted by VAT registration when dealing with other registered companies or governmental institutions.
- Improved Record Keeping: A better record-keeping system is required for VAT registration, which makes it easier to track, report, and audit financial data.
- Better Financial Planning: Businesses who register for VAT have a clearer financial picture, which helps with planning, cash flow management, and potential investments.
VAT Charges for Various Types of Online Supplies in UAE
- For both domestically produced commodities and imported goods or services, the UAE imposes a 5% VAT tax.
- VAT applies to some sorts of transactions when it comes to online purchases of supplies. This indicates that VAT applies to goods and services provided to clients within the UAE. However, there are no VAT costs necessary while making supplies for consumers outside of the UAE.
- Online gaming, software downloads, streaming music and video, site hosting, and other digital services are all taxed. These services must be charged at a rate of 5%, whether they are delivered electronically from the UAE or another country.
- Businesses that sell products online must charge VAT if the products are delivered to clients within the United Arab Emirates. All invoices and receipts for these supplies should make it clear that the applicable VAT rate is 5%.
VAT Services for Amazon Sellers in UAE
It might be difficult for Amazon sellers to navigate the VAT requirements, but BMS Auditing provides dependable and effective Amazon VAT services to make the process simpler. Due to misinterpretations of FTA legislation, many companies selling on Amazon in the UAE are subject to VAT fines and penalties.
Contacting our VAT Consultants in UAE will allow you to address any of your VAT-related issues, ensuring compliance and preventing FTA fines. To support the smooth and effective operation of your business, we provide top-notch VAT services in the UAE. Don't wait any longer; contact us right away and let our professionals assist you in achieving VAT compliance so that your company can flourish in the UAE.
