How to register VAT for a freelancer in the UAE?

freelancers in the UAE

For many freelancers in the UAE, this era of creation and innovation suits them like a glove. In this sense, anyone with outstanding abilities in any area will be able to perform as a freelancer. In the same way, the government of the emirates has developed policies that encourage new sources of work. Through these policies, they seek to stimulate their economy, either through VAT, taxes, visas, and the delivery of freelance work permit.

In this article, we will talk about VAT for freelancers in the UAE. Additionally, we will explain how you can register for VAT in the UAE and other related aspects. Let us observe now:

  1. What is VAT for registration purposes?
  2. How to register for VAT as a freelancer nowadays?
  3. Steps to register VAT as a freelancer in the UAE
  4. What are the reasons that motivate a freelancer in the UAE to seek professional accounting services?
  5. Additional advice
  6. How can we help you register for VAT as a freelancer in the UAE?

1. What is VAT for registration purposes? 

When you are freelancing in the UAE you must take into consideration the amount of income you generate. In this regard, it is important to know if you earn more than AED 375,000. This is because, from that figure, every freelancer in the UAE must pay VAT.

This should be taken into account by all freelance workers who have their dubai freelance visa in the UAE and wish to work legally without complications. In this way, it can be taken into account that there will be many workers who exceed the figure of AED 375,000.

1.1 Who are the freelancers who exceed AED 375,000?

When you do freelancing in the UAE it is easy to exceed the indicated amount because the city itself, with its fluidity and speed of economy, leads you to achieve it. In this sense, such a strong economy in such a cosmopolitan territory allows the income to be high. So, we can present this list of freelance workers in the UAE that can easily exceed AED 375,000:

  • Influencers
  • Coders
  • Photographers 
  • Artists

Many more freelance visas will allow you to earn such an amount of money. In this regard, keep in mind that when you are a part of the many freelancers in the UAE, the most important thing is how much what you do is worth. If you consider the true value of your work and manage to position yourself in the market, you may need to pay VAT and you may not even realize it. 

Likewise, if your income is between AED 187,000 and AED 375,000, it is optional to consider registering for VAT cancellation. If you freelance in the UAE and your income is less than AED 187,000 you cannot declare yourself for VAT purposes.

To learn more about how what is VAT for registration purposes, please visit Connect Freelance.

2. How to register for VAT as a freelancer nowadays?

The VAT registration process is very simple. Freelancers in the UAE can register for VAT whether they are residents or non-residents. If you are a full-time worker you can apply for your freelance visa in the UAE. On the other hand, if you are a non-resident, you will get your residence permit once you have your visa approval, which will allow you to freelance in the UAE. Contact us for more information about how to register for VAT as a freelancer nowadays.

3. Steps to register VAT as a freelancer in the UAE:

There are several steps you must follow for freelancers in the UAE who want to register for VAT.

3.1 Obtain your license

If you freelance in the UAE you can register for a tax registration number (TRN). In this regard, you should do this when you have your freelance visa in the UAE. You must also prove that your annual income is over AED 375,000.

Please note that using your permission from your employer you will obtain your commercial license. Consequently, with this commercial license, you will be able to start as a freelancer in the UAE, and after this process, you must do the TRN tax registration. This ensures that freelancers avoid conflicts with company policies.

3.2 Online registration

Through the FTA (Federal Tax Authority) portal you can do the VAT registration online.

On the FTA website, you can create an access credential. In this sense, it will be an electronic service account. With it, you will be able to log in with your user as a freelancer in the UAE.

Click on the registration and follow the steps. You have to get your ID details and provide your email.

The process is simple as you can start with creating your password and codes. Additionally, you will be asked to verify your email address. This way you can ensure secure login.

After this process, you must log in to the FTA portal of the E-Service account. You can see your unique TRN number because it is visible on the portal.

3.3 Complete your registration

To complete your registration, you will need several essential documents.

One has to create a login credential on the FTA website, also known as an e-service account. One can start by clicking on registration and following the details such as email ID, passwords, codes, and email verification for secure login.

Log in to the FTA portal of the E-Service account, and you can see the TRN number visible on the portal.

Essential documents for registration:

  • Copies of passport along with Emirates identity card.
  • Memorandum of association
  • Bank account details
  • Sponsorship agreement
  • Financial reports of projected income
  • Business license
  • Previously audited financials

3.4 What are the FTA-approved steps for you to achieve VAT compliance as a freelancer in the UAE?

When you are a freelancer in the UAE you must be aware of the VAT treatment. In this sense, for any freelancer, the VAT treatment is similar to that of any company. When we talk about any company, we mean any standard company in the UAE. However, the VAT treatment for a freelancer can be more flexible.

For this purpose, VAT will be based on the invoice number. Additionally, it will be based on the invoice amount number. Consequently, each item should be taxable if the corresponding VAT is applied to it. For freelancers in the UAE, it will be necessary to separate invoice items that are tax exempt. In this regard, such tax-free invoice items should be mentioned separately on the invoice itself.

Please note that the invoice must clearly show the total VAT. When you do this, this invoice VAT total must go with the total VAT value. Additionally, the invoice sequence must be unique numbers. In this regard, the sequencing of the numbers must be strictly adhered to. This is to avoid any duplication errors.

You can make use of some software that is developed for freelancers in the UAE. In this regard, you should try to make use of any software that is friendly to your work and easy to use.

4. What are the reasons that motivate a freelancer in the UAE to seek professional accounting services?

4.1 Avoiding business interruption

The first reason why a freelancer in the UAE hires professional accounting services comes associated with avoiding business interruption. Keep in mind that freelancing in the UAE is a one-man job. In this regard, a person can have a small team to help you in your business. However, maintaining a full-time accountant, or perhaps a bookkeeper, will be a variable expense. 

Because of these reasons, several firms in the emirates offer their auditing services. Similarly, you can find companies offering VAT services. Through these companies, you can perform financial audits. Additionally, they will help you to submit VAT-related reports.

For any freelancer in the UAE, it is much wiser to hire an accounting services consultancy. In this way, you avoid all the expenses and conflicts that a full-time financial department can generate.

4.2 A way to avoid penalties

When you are a freelancer in the UAE, you participate in 100% of the business activities. In this respect, you will have to make your own decisions and accept penalties if you are at fault. This is necessary because one of the main criteria for VAT is the timely filing of VAT.

There are strict penalties for failure to file VAT. So it is very beneficial for you as a freelancer to use the services of an auditing firm. Consequently, you will be able to avoid unnecessary expenses or liabilities and you will also have the peace of mind of having a business up to date with its taxes.

4.3 Save on software investments with professional help

Accounting software programs claim to provide a 100% solution, but only a competent accountant can distinguish the harvest from the weeds. Rather than investing money, time, and energy in software that one may not understand, it is better to seek professional help from auditing firms in the UAE, which provide accurate software solutions and reports for VAT filing.

4.4 Maintain financial records

For every freelancer in the UAE, this step is of utmost importance. Even if your income does not entitle you to be registered for VAT, you should still give importance to your financial records.

In this regard, keep in mind that even if you do not register for VAT, you will have clients who will need to be registered. Thus, your customers may ask you to draft your invoices in a certain format or form. Then the importance of keeping your books up to date arises. In addition, you will have to check all financial records regularly enough.

Keep in mind to follow all the guidelines involved in VAT compliance for freelancers in the UAE. This way you will avoid problems in the future because you need to be up to date with each of the requirements of the law to be able to practice without inconveniences.

4.5 Importance of filing your tax returns

Self-employed individuals working in the UAE are required to file tax returns and the same must be done quarterly without fail. In addition, you must make sure that you have no discrepancies in your records. By complying with the laws you will avoid the fines that can be generated.

Therefore it is of utmost importance to give value to this point. In this sense, companies in the past have been fined with very high penalties. Likewise, it could be the case that a company could lose its license to operate. 

The license to operate is the soul of any company and losing it would mean stagnating in the progress and development of any business.

5. Additional advice

When you are going to start as a freelancer in the UAE, it is advisable to:

Know and learn about the laws of the country. Additionally, it is advisable to have knowledge related to their customs and religion, since in this territory religion and culture are highly respected to exercise any job. Also, keep in mind that many times religion, culture, and politics are linked in many economic and labor aspects. In this regard, you must fill yourself with related information.

Contact the competent authorities. If you need guidance, you can resort to websites or educate yourself on your own, but if additional doubts arise, you can turn to the competent authorities who are available to guide the citizen who wishes to work honestly and legally.

There are government-authorized websites that provide assistance and guidance related to persons wishing to register for VAT purposes. In this sense, keep in mind that the more informed you are, the better your chances of working without setbacks and penalties.

6. How can we help you register for VAT as a freelancer in the UAE?

It is always important to comply with governmental requirements to operate legally within any country. In this sense, the globalized world allows us to have at our fingertips the necessary information to fulfill without the inconveniences of any legal process to start working.

To access the best information related to your VAT registration in the freelance world, we offer you our services. You can always count on specialized professionals who will guide you in any aspect related to your VAT and tax formalities. All you need to do is register or log in!

When it comes to freelancers and helping them achieve their goals, Connect Freelance has the best team. You can email us at contact@connectfreelance.ae or contact us at +971 43 316 688. On our website, we can provide you with help and guidance regarding freelance jobs, permits, visas, and different activities in which you can perform within the field of freelance work that the freelance world has to offer.

Are you looking for job opportunities for your professional growth? On thetalentpoint.com, we are proud to offer a wide variety of jobs to strengthen your economy. In this sense, you can start by sending your CV to contact@thetalentpoint.com and we will gladly evaluate your professional profile.

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