What is Tax Registration Number (TRN) & Why it is Important in Taxation?

The introduction of the Value Added Tax (VAT) in 2018 has brought fresh changes to the UAE business landscape which has been hitherto known to be a no-tax regime. As a result, anyone whose business turnover exceeds AED 375,000 is required to mandatorily register for VAT. And those with a turnover above AED 187,500 are allowed to undertake voluntary VAT Registration in the UAE.

The Federal Tax Authority (FTA) issues each registrant a unique number called Tax Registration Number, shortened as TRN. The businesses that are new to the scenario of VAT in the UAE may have understandable confusion regarding the importance of TRN in taxation and the procedures to get it. This article delves into the key questions such as ‘what is a TRN’ and its significance in the background of VAT in the UAE.

What is the Tax Registration Number (TRN) in the UAE?

TRN is a unique 15-digit number that an entity obtains after making VAT registration in the UAE. The TRN issued by the FTA is helping the Authority in differentiating one VAT-registered company from others. The entity to which the TRN is assigned is termed as a Registrant and as per the UAE VAT Law, the registrant is mandatorily required to mention the TRN in many documents related to VAT.

The businesses get their TRN when their UAE VAT registration application is approved by the FTA. The FTA issued the TRN and it gets automatically sent to the registrant after the completion of UAE VAT registration. After obtaining the TRN, the companies or traders can charge VAT to the customers.

Significance of the Tax Registration Number (TRN) in the UAE?

The TRN allows the tracking of all the transactions made by individuals as well as businesses. Furthermore, the TRN facilitates smooth communication between the supplier and buyer of goods. The TRN is required for the companies while claiming back the tax paid on the purchase of goods and services made by them. The following are the other major scenarios that make the TRN important:

1. The TRN provides the registrant with a unique identity
2. With the TRN on the registrant’s Tax Invoice, the customers will happily pay the VAT amount
3. With the TRN on the Tax invoice, the registrant can take the VAT credit on its eligible purchases and other expenses
4. For any communication with FTA, the registrant is required to quote the TRN
5. The businesses must mention the TRN in documents related to VAT such as Tax invoices issued by the seller, VAT returns, and the tax credit notes of a business

How to Apply For Tax Registration Number (TRN) in the UAE?

The registration process for VAT and TRN number are similar. The persons eligible for VAT registration can seek the assistance of efficient tax agents in Dubai for completing the process. The Person required to register for Tax pursuant to the provisions of the Decree-Law must file a Tax Registration application with the Authority within 30 days of being required to register. The following steps are needed to obtain TRN in the UAE.

1. The taxable person is required to login to the e-services through the online portal of the FTA and makes the registration
2. After completing the VAT registration, the taxable persons need to click on the button and receive all the information regarding VAT in UAE
3. There are eight sections of the UAE VAT and the applicant should fill out the sections with the required details
4. In the final step ‘submit the details for approval’ and upon approval, the applicant would be registered for VAT and the TRN would be sent with a certificate

The registrant is required to assess the VAT applicability on its business-like 5%, 0% or exempt specifically before applying for VAT Registration. Because at the time of registration the activities need to be selected properly and the particular fields for 0% and exempt are required to be correctly applied.

Use for Group VAT Registration

The companies which are interconnected with each other through common shareholding, common control can avail of the benefits of VAT group registration. The group VAT registration is mainly benefiting the intercompany transactions will be without VAT and can save a lot of administrative time and one single VAT return for all the companies under Group Registration. Here, it should be noted that there are different requirements for Group VAT registration.

Amendments in Business Address During Pandemic

Many businesses are upgrading office taking advantage of the rent reduction during the COVID-19 pandemic. However, they must amend the contact details mentioned in the TRN application. Failing to do so might cause administrative penalties. The FTA advises the businesses to file an amendment to the existing VAT registration and update the registration with the new details and trade license. Consult with the best tax consultants in Dubai for advice regarding the amendments.

Documents/ Information required to Obtain Tax Registration Number in the UAE

The registration process to obtain the TRN in UAE should be accompanied by the submission of the required documents. To ensure that the documentation is done in compliance with the regulations, the taxable persons can enlist the services of the best tax agents in Dubai, UAE.

1. Copy of Trade license of the company
2. Address and contact details of the company (Include PO Box as well)
3. Contact details of the owner of the company
4. Memorandum of Association of the Company along with bank details and income statement for the past year
5. Turnover declaration letter in the format given by the authority.
6. Passport Copies, Emirates IDs of the authorized signatory and the document to prove the authorized signatory.
7. Custom registration, VAT in any other GCC country details and import or export declarations

Here, it should be noted that any kind of wrong information or late registration may attract penalties like, late VAT registration attracts a penalty of AED 20,000.

How to Verify the UAE Tax Registration Number?

If you want to verify that the TRN of any person is correct or not, then visit www.tax.gov.ae and enter the TRN number in the search box and press enter. If the number is a verified one, then the result would show up with the legal name of the entity.

Tax Agents in Dubai Offers Assistance with Tax Registration Number

The Tax Registration Number or TRN is a unique number that the tax registrants obtain after registering for VAT in UAE. The TRN is a vital number that is mandatorily required for a number of tax-related situations including while filing the tax returns, and also while claiming back the tax paid on the purchase of goods. The taxable person can obtain the TRN while registering for VAT in the UAE for which the services of eminent tax agents in Dubai such as Jitendra Chartered Accountants (JCA) comes in handy for the businesses. JCA has a team of highly qualified tax agents who are capable of letting the companies easily sail through the process of VAT registration in the UAE thereby obtaining the TRN without any hassle.