A Guide to VAT

Understanding Value Added Tax in the UAE

How Does VAT Work?

Value Added Tax (VAT) is an indirect tax imposed on the supply of most goods and services. It was introduced in the UAE on 1 January 2018. Etisalat’s products and services are subject to VAT and Etisalat is obligated to collect and remit funds to the Federal Tax Authority (FTA). Etisalat is legally obliged to comply with this Government mandate.

VAT is levied on the supply of all goods and services if no explicit provision is made to impose a zero rate or an exemption. The VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

The TRN is the identification number given to every person registered under UAE VAT. Only persons with a valid TRN can charge VAT on supplies & services. It is mandatory for business customers, who are entitled to recover their VAT input, to provide their TRN with supporting documents to Etisalat.

Do You Have Your Tax Registration Number?

I have the TRN Number. I would like to submit it to Etisalat to receive full invoices.

Simple. Log in to Business Online Portal and submit your TRN directly to Etisalat. Once submitted, you will receive complete tax invoices from us on your next bills.

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I need to apply for my TRN Number.

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What is VAT?

Value Added Tax (VAT) is an indirect tax that is being introduced by the UAE Government, which will be payable by both business and Individuals. VAT is a tax on the consumption or use of goods and services levied at the point of sale.

Will Etisalat apply VAT on my bills?

Yes. Effective 1st January 2018, Etisalat’s products and services shall have VAT applied upon their charges / fees in compliance with the provisions of the law and its Executive Regulations.

How can a business register for VAT and receive a Tax Registration Number (TRN)?

Please consult with a tax expert or visit the UAE Federal Tax Authority website for more information (www.tax.gov.ae) on registering for VAT and how to get a Tax Registration Certificate.

I am a Business owner. I have registered with the UAE Federal Tax Authority and have received my certificate and Tax Registration Number (TRN). Do I need to share this with Etisalat?

Yes, please submit your TRN details with us in order for us to reflect your TRN in the Etisalat Bills (Tax Invoice).

As per regulations, your Tax Registration Number (TRN) should be reflected in the Etisalat bills (Tax Invoice) in order to support your Input Tax claim in your VAT return.

How can I submit my TRN to Etisalat?

Simply log in to Etisalat’s Business Online Portal and submit your TRN details. You would also need to provide supporting documents. Follow the below steps.

Step 1:  Log in to Etisalat Business Online Portal

Step 2: Once logged in to the Business Online Portal, select MANAGE in the menu and then click on, ‘My Companies’.

Step 3: Select the Party ID, and click on ‘UPDATE’ to change or update the Tax Registration Number (TRN).

Step 4: Upload a PDF copy of your company’s “Certificate of Registration for Value Added Tax in the United Arab Emirates”.

Step 5: Review the details, and then click ‘UPDATE’ to confirm the details.

Step 6: Stay on the page until you are navigated to the confirmation message of your update being successful. 

When is the VAT implemented and what will be the rates?

VAT is introduced across the UAE on 1 January 2018 at a standard rate of 5%.

How will VAT apply to Etisalat products and services?

VAT applies to all applicable products and services at the standard rate of 5% for goods and/or services used and enjoyed in the UAE.

However, in accordance with the regulations for telecom services, a zero (0%) VAT rate is applied for services used and/or consumed outside of UAE e.g. mobile roaming charges, or other 3rd party-related services where it is exempt like m-parking fees.

Is it compulsory to pay VAT?

Yes. The applied VAT is included in the Amount Dues in your Etisalat Bills (Tax Invoices).

Exceptions to VAT are only by law, and these are published by the Federal Tax Authority. There is a possibility for business owners to claim back their VAT payments, provided they have registered for VAT and meet the requirements. For further details, please visit www.tax.gov.ae

How will Etisalat charge VAT for prepaid customers?

From 1st January 2018, most of the products and services provided by Etisalat shall have VAT applied upon consumption, in compliance with the provisions of the law and its Executive Regulations i.e. a bundle of AED 100 will become AED 105

Will there be transactional rules?

Special rules will be provided to deal with various situations that may arise in respect of supplies that span the introduction of VAT. For example:

• Where a payment is received in respect of a supply of goods before the introduction of VAT but the goods are actually delivered after the introduction of VAT, this means that VAT will have to be charged on such supplies. Likewise, special rules will apply with regards to supplies of services spanning the introduction of VAT.

• Where a contract is concluded prior to the introduction of VAT in respect of a supply which is wholly or partly made after the introduction of VAT, and the contract does not contain clauses relating to the VAT treatment of the supply, then consideration for the supply will be treated as inclusive of VAT. There will, however, be special provisions to allow suppliers to charge VAT in situations where their recipient is able to recover their VAT but where there is no VAT clause.

What is Etisalat’s Tax Registration Number?

Etisalat’s Tax Registration Number is 100023129800003 , The official registration certificate is available here (VAT Registration Certificate)