If a business is situated outside the United Arab Emirates, then it is categorised as an international company. If an organisation is identified as a non-resident business, then it must register with the Federal Tax Authority to sell its products or services in the United Arab Emirates by using Amazon. Non-registration or the late registration of such an organisation will lead to a heavy penalty charge.
To facilitate sales through Amazon it is not mandatory for resident businesses to register for VAT in the United Arab Emirates. Mandatory or voluntary registration criteria must be fulfilled for the United Arab Emirates resident companies for their VAT registration. If a business annual turnover exceeds AED 3,75,000 in a period of the next 30 days,then the business would qualify for mandatory VAT registration. The organisation then must go ahead and register with the FTA get their temporary reference number so that they can comply with the UAE's Value Added Tax laws and also to sell their products and services on the Amazon website of UAE. A limit of AED 1,87,500 is placed on the voluntary registration.
It is mandatory for all businesses to register themselves with the value-added tax registration within the period specified by the FTA. If a non resident business makes its registration after the completion of sales on Amazon UAE, they would be liable to pay a penalty of AED 20,000.
If the sales of a business on Amazon meets or exceeds the turnover of AED 3,75,000 then the particular business will have a minimum of 30 days to reach the mandatory registration limit and to register for VAT and obtain a temporary reference number in the case of a resident business. If in case the business fails to register within the given time then the business will have to pay a fine of AED 20,000.
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