The United Arab Emirates is a widely popular business destination due to its progressive policies and streamlined company setup procedures. In addition, the UAE government introduced a Tax Registration Number (TRN) system to further facilitate smoother operations in the country. The Tax Registration Number UAE is a unique identifier for businesses and individuals, used for tax-related purposes. Moreover, it is a fundamental requirement for businesses operating in the country.
So, whether you are a business owner, a working professional, a visitor, or a resident, each and everyone needs to understand the significant aspects of the TRN number in UAE. Therefore, this guide will walk you through the essential insights on its eligibility, process, verification, and more.
Tax Registration Number UAE
A TRN number in UAE is a unique 15-digit identification number assigned to businesses and individuals for tax purposes and conducting various financial and business transactions, such as VAT processes, filing tax returns, etc. Nevertheless, to obtain a Tax Registration Number UAE, the business entity needs to meet certain financial criteria. For instance, it should be involved in taxable activities and the annual turnover must exceed the defined threshold.
Additionally, the TRN is subject to a validity period in the UAE. Hence, the businesses must ensure to get it renewed accordingly to avoid any disruptions in their operations.
Types of Tax Registration Number UAE
Basically, there are five types of TRN numbers in UAE:
- Social Security number The most common form of TRN, used for purposes like filling the income tax returns of employees, for Social Security and Medicare facilities to the employee, for parents to claim income tax as a dependent on behalf of their children, etc.
- Employer identification number Commonly used by corporations, trusts, and real estate that are taxpayers.
- Individual tax identification number Used by non-resident individuals in the UAE to avail tax return benefits. The applicant will have to complete Form W-7 along with documents supporting their non-residential status.
- Adoption tax identification number Used during the domestic adoption procedure when the parents cannot obtain the adopting child’s SSN in time to complete their tax returns.
- Preparer tax identification number Issued to those who wish to complete all or part of a tax return or refund to another individual.
Procedure to Obtain Tax Registration Number UAE
The following are the steps involved in the process of obtaining a tax registration number in the UAE
Determining the eligibility for registration
The first civil step to the TRN number application is determining if the person is eligible to pay corporate tax in the UAE. As per Article 11 of the Corporate Tax Law, the following entities are subject to corporate taxes in the UAE:-
- Domestic and foreign firms registered in the UAE
- Permanent establishment formed by non-resident juridical persons
- Non-resident people deriving State Sourced Income
- Non-tax residents or companies with the legal acquisition of Income from Immovable Property
- Legal entities with an annual turnover of more than AED 1,000,000 as per the Gregorian calendar
Applying for TRN
Applying for a TRN is a prerequisite for registering for corporate tax in the UAE as it is necessary to complete any transactions associated with taxes. The applicant can start off by applying online through the official website of the Federal Tax Authority (FTA). They will be provided a form that requires details concerning their business such as its legal status, the trade license number, and other mandatory information. Upon submitting the form, the FTA will assess the application and issue the TRN accordingly.
Assembling the documents
Once the TRN is issued, the next step is to gather the documents required to complete the process. For example,
- A valid trade license (both original and photocopy) issued by competent authorities in the UAE.
- A copy of the MOA (Memorandum of Association) outlining the roles of the company, the shareholders, and the share capital.
- Passport copies of the shareholders, directors, and other authorized signatories.
- Photocopies of the ID of all the authorized signatories.
It is important to note that all the documents must be accurate and updated before it is submitted to the authorities.
Filing tax registration application
Now that the applicant has the TRN and other important documents, they are all set to apply for the tax list. In this step, they need to fill out an application form providing information about their organization’s efforts, changes, and other exemption-related information.
Get appropriate approvals
The FTA will then review the application and verify all the information provided. They may also ask for further supporting documentation if necessary which the applicant must provide on time to have a smooth run of the approval.
Things to keep in mind while applying for Tax Registration Number UAE
It might seem easy, however, there are specific pitfalls that can be observed while applying for a TRN number in the UAE. For example,
- When providing the information for registration, make sure that all the details are provided correctly and systematically.
- Be aware of the timeframe specified for application filing and submission of any additional documents. Failure to meet deadlines may lead to delays in the process or even penalties.
- Always remember to display the TRN number on invoices, paperwork, and at the place of business.
- Maintain accurate records of all transactions, invoices, and relevant documents involving tax for audit purposes.
- Make sure to maintain compliance with the tax authorities and stay up-to-date on UAE tax laws and regulations.
- Before diving into the process, it is critical to understand the basic tax requirements and procedures of registering for taxes. Hence, it is always advisable to seek professional services to avoid any challenges and make the procedure as effective and fast as possible.
Verifying the Tax Registration Number UAE
Taxes are a liability for businesses with profit-maximizing objectives. However, paying taxes and verifying their tax identification number can be beneficial for them. For instance, it will help the organization look bigger, attracting more customers for the good of the business. Most customers tend to deal with businesses that have a TRN number as it looks more professional. In addition, it will create an impression that the revenue of the company is greater since it has exceeded the minimum limit of turnover for VAT registration. Most importantly, it would be complying with tax laws which again removes suspicions and helps businesses operate stress-free.
The Federal Tax Authority allows businesses and individuals to verify their TRN number through their online portal. The expert tax consultants of Shuraa Tax can help you in this regard and assist you with your TRN verification in the UAE. The verification process includes the following steps:
- Visit the website of FTA
- Enter the TRN and the security code
- Click on the “validate” button
- A page will appear displaying the Legal name of the business with the TRN confirming if it is registered and valid
Choose credible tax consultants of Shuraa
Thus, in conclusion, businesses and individuals must comply with the specific rules and regulations of the UAE as well as identify and adhere to the requirements of the authorities to make the registration process easier and more efficient. This will help businesses remain legally operative, further contributing to the continuous growth of the UAE economy.
It is highly recommended to seek the involvement of professional tax consultants of Shuraa Tax and Accounting Consultants to address the tax registration needs, thereby achieving a high level of compliance with the given provisions. Book your free consultation today!
