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A business keeps growing and expanding constantly. In this process, it is important for businesses in UAE to be cognizant of the impact of changes in the business on compliance under VAT rules. Let us understand the type of business changes which have an impact on a business’s compliance under VAT and the steps to be taken in each case.
The changes in a business which impact compliance under VAT can be categorized into 2 types:
Let us understand these in detail.
This type of change is applicable to persons who are registered under VAT in UAE. When there are changes in their account details maintained with the FTA, it is important that these changes should be notified to the FTA. The FTA will amend the VAT registration accordingly.
Some examples of changes in account details, which should be notified to the FTA are:
Certain changes in account details, such as business activities, customs registration information, can be changed online by logging in to the FTA portal. These changes and how to make these changes are explained in detail in our article 'Online amendment of registration details'.
Certain other changes in account details, such as address of the principal place of business, bank account details, have to be notified in writing to the FTA. These changes have been explained in detail in our article 'Amendment of details blocked for online modification'.
There are certain changes which occur in a business which lead to a change in the business's circumstances materially. Examples of such changes are:
These changes in business circumstances will result in a requirement to register under VAT or cancellation of registration.
It is a taxable person’s responsibility to ensure that the information on which their registration is based, is accurate and up to date. In the event of a change in business details, whether it is a change in account details or change in business circumstances, the taxable person should notify the FTA of the change, in the relevant manner. In case a change in business details is not notified to the FTA, a penalty could be levied. The administrative penalty for failure to notify the FTA of business changes is as follows:
|Failure by a registrant to inform the FTA of any circumstance that requires amendment of the information in the Tax Records kept by the FTA||5,000 for the first time 15,000 in case of repetition|
Hence, it is essential that taxable persons should ensure to inform the FTA in the event of a change in their business details. This change can be a change in account details or a change in business circumstances. Based on the type of change in business details, appropriate actions to notify the FTA need to be taken.
Read more about FTA
VAT Support Channels by FTA in UAE, Steps to Submit e-guarantee in FTA portal, Administrative Penalties under Tax Procedures Law by FTA in UAE, FTA Accredited Tax – Accounting Software Requirements, What is FTA Audit File (FAF), Benefits of using FTA Approved Tax Accounting Software in UAE, e-guarantee Cancellation in FTA portal
UAE VAT Return, VAT in UAE, How Does VAT System Works, Frequently Used Terms in VAT, VAT Exempt Supplies in UAE, VAT Return Form 201, Tax Audit under VAT in UAE, Supply under UAE VAT, Supply of Goods and Services in UAE VAT, Input Tax Recovery under VAT in UAE, VAT Return Filing in UAE, VAT Return Filing Period in UAE, Tax Agent under UAE VAT
FAQs on VAT
VAT FAQs on Education Sector in UAE, VAT FAQs on supply of real estate in UAE, VAT FAQs on implementing VAT in your business, VAT FAQs on Zero Rate and Exempt Supplies in UAE, VAT FAQs on UAE Free Zone, VAT return FAQs
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