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Abu Dhabi, UAETuesday 26 March 2019

VAT q&a: 'Do I need to re-register if my company's name has changed?'

The Dubai business owner has a new type of licence and is unsure how this affects this firm's VAT status

The UAE company owner first registered for VAT when the tax was rolled out last year. Photo: Getty Images
The UAE company owner first registered for VAT when the tax was rolled out last year. Photo: Getty Images

I recently changed from a free zone to a DED onshore licence after being advised this was the correct licence-type for my business. As part of the change, I was required by the DED to substantially change the name of the business. The business has been running for some years and other than those two changes, the customers, suppliers and operations are essentially the same. Do I need to apply for a new VAT and tax registration number or can I just continue to use my existing TRN without advising the Federal Tax Authority of the change? It doesn’t make any sense to me to deregister the old company and apply for a new TRN. If I did this, I might be fined for having breached the mandatory registration limit without registering before, when in fact I have been registered since January 1 last year. KC, Dubai

You are correct; you cannot continue with the existing registration and TRN without notifying the FTA of the change. What the FTA has advised in this situation is that you file an amendment to your existing registration and update the registration with the new name and trade licence. They also require a letter on company letterhead, signed and stamped, that explains why you have changed your business name. Once approved, they will make an amendment to the VAT registration name to reflect the updated company branding.

The letter needs to be attached to your amendment in the FTA portal. You are usually limited to attaching only one document in each available upload, so combine documents into one PDF if you need to upload more than one. I recommend attaching both the old and new trade licences with the letter and the existing VAT certificate.

The FTA has requested I amend my VAT registration and supply an updated trade licence and owner's passport, which have both expired since my first registration. I cannot get past the bank details page on the portal. What can I do? UP, Ajman

When registration first opened for VAT at the end of 2017, the registration process asked for company bank details but providing them was not mandatory. You could skip this page and move on and complete the registration. This meant that small businesses not operating a company bank account, who were using the personal account of the owner, or even cash, could register for VAT. These companies have been filing returns and making payments without any issue.

At some point during 2018, the FTA made it mandatory to provide company bank details and therefore you cannot now register, file an amendment or receive a VAT refund unless you have company bank account details included in the FTA portal. The only way to file the required amendment is to open a company bank account. This can be a time consuming and frustrating process as many banks are reluctant to open accounts for small businesses, and it can take a month or so before the account is operational.

The FTA seem to be taking a pragmatic view with the timing of registered businesses completing the amendment; although, they ask for it to be carried out within five days, they do not appear to be penalising those taking much longer.

I already paid my VAT dues via an exchange house but I did not submit the return online. What do I need to do? Can I still do this if I have missed the filing deadline? LS, Abu Dhabi

You need to file the missed return on the FTA portal as soon as possible. You cannot file any subsequent returns until every previous quarter’s return has been filed. I assume from the question that you paid the VAT by the deadline. Unfortunately, if you look on your payments tab in the FTA portal you will have been fined Dh1,000 for the late return; you will also be charged interest on the amount of tax due from the date of the return deadline to the date that you completed the filing. Even though you made the payment on time, the FTA does not recognise any payments until the return has been filed. Interest can build up quickly, so act quickly

Lisa Martin, a chartered accountant with more than 20 years' commercial finance experience, is the founder of accounting, auditing and VAT consultancy, The Counting House. Email any VAT queries to pf@thenational.ae

Updated: March 11, 2019 04:07 PM

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