If your taxable turnover per annum touches the threshold of AED 187,500, then you are given the option to voluntarily register. Most companies choose to register their business on the VAT system register for VAT in UAE for various reasons. Some of the top benefits of registering your business for VAT when you are actually not bound to are that your company:
- Will get a tax registration number (TRN) which puts a good impression on your clientele and eventually amplifies the degree of confidence of your existing and potential customers/clients in your small business.
- Would qualify for refunds on VAT paid for business supplies. Even if you have been doing business for the past six months, but haven’t reached the threshold yet, being VAT-registered will allow you to reclaim VAT provided that you have kept invoices and records.
- Can compete with big players in the industry as it will provide you with an edge over new small businesses that have not registered for VAT yet.
- Opens to new business opportunities. As you know how most businesses, especially the established ones hesitate in working with a start-up unless it is registered for VAT in UAE.
- Doesn’t have to bother about the penalties that may arise on a whim at the later stage when your taxable turnover reaches the VAT threshold.