The Commercial Activities Certificate is an important document issued by the Federal Tax Authority to registered businesses generating enough revenue. It confirms that the business is legally conducting commercial operations in the UAE. This allows the firm to claim credit for the VAT paid on supplies and services required to run the business. In this article, we will discuss the importance Commercial Activities Certificate for Value Added Tax (VAT) in the UAE.
To qualify for a Commercial Activities Certificate, the business must meet the following requirements:
Businesses operating in the nation must regularly engage in this activity. The requirements for a continuous commercial activity are unlikely to be met by one-time or infrequent transactions.
The procedure for obtaining a Commercial Activities Certificate is straightforward, and involves the following steps:
The first step involves choosing the valid VAT Tax Registration Number (TRN) linked to the business. Provide details like certificate start date, country for which it is required, and preferred language. Upload requesting a letter from the business and a valid trade license.
Provide business details like legal name, trade name if different, business activities, and address. Upload documents proving business ownership and activities like commercial license, lease agreement, SAP charts, etc.
Confirm if the printed certificate is needed, the number of copies, and the delivery address. The default address will be the one in the user profile but an alternative can be chosen.
Proceed to the payment step and pay the initial submission fee. Once paid, the request gets registered and assigned to a Federal Tax Authority officer.
Submission allows real-time tracking of application status via email/portal. The officer reviews and takes necessary actions to issue the certificate.
| Fee | Description |
|---|---|
| Commercial Activities Certificate Fee | AED 500 (one-time fee) |
| For Printed Certificate | Additional fees of AED 250 will be added for each requested hard copy certificate |
To apply for a Commercial Activities Certificate, businesses need to submit the following key documents:
FTA verification: The agency will verify two important things:
It's important to supply all information completely. Incomplete forms can result in delays in receiving the certificate. Always refer to the FTA website to ensure supplying the exact papers they need, so as to ensure a smooth application process.
Holders of a valid Commercial Activities Certificate can claim a refund for the VAT paid outside the UAE. This includes VAT paid on:
To claim such refunds, businesses must submit refund applications to the FTA along with supporting documents like import documents and invoices. Refunds are processed per applicable Double Tax Avoidance Agreements (DTAA) provisions between the UAE and other countries.
Obtaining a Commercial Activities Certificate brings several important benefits for businesses:
The tax certificate fee is AED 5,00.
Yes, you can use the Commercial Activities Certificate for corporate tax purposes to take advantage of Double Taxation Avoidance Agreements (DTAA) and to claim a refund for the VAT paid outside the UAE. However, it is not a substitute for a Corporate Tax Registration Certificate.
Farahat & Co can help you with application requirements and can help you in obtaining the Commercial Activities Certificate for VAT in the UAE.
In conclusion, obtaining a Commercial Activities Certificate helps the tax registrants benefit from Double Taxation Avoidance Agreements (DTAA) and helps to claim a refund for the VAT paid outside the UAE. However, expert assistance may be needed for businesses to obtain a Commercial Activities Certificate as it involves complying with the Federal Tax Authority (FTA) requirements. This is where the role of professional tax agents in Dubai becomes important. By leveraging the expertise of Farahat & Co., you can obtain your Commercial Activities Certificates smoothly and in a timely manner to ensure compliance with the Value Added Tax (VAT) law.