TRN in the UAE, all you need to know
By kitaab
Once you register for VAT with the FTA, a business is assigned a unique TRN number. This TRN certification of a company is what allows it to charge VAT from the customers. This TRN number is what helps the FTA track all corresponding transactions by the company. Tax agents can now also use this TRN number to check and verify information about a VAT registered organization before preparing invoices. Though earlier the government did not permit third party tax agents to validate TRN numbers, it now can be done.
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Learn moreVAT registration to obtain TRN
A firm whose total income exceeds AED 375,000 has to mandatorily register for VAT and receive a TRN. Firms with income less than AED 375,000 but less than AED 187,500 can choose to voluntarily register for VAT.
Once registered, the firm must submit all inputs pertaining to the VAT earnings and expenses of the firm. The difference between the two is if the earnings are more has to be paid by the firm to the FTA. Meanwhile, if the VAT expenses of a firm are higher, the difference can be obtained as a refund from the FTA.
Verifying TRN
A tax agent can assist in verifying the TRN number and details of a firm you are working with prior to generating invoices or planning tax refunds. Even when receiving assistance from external tax agents, you have to be educated on the VAT registration process and TRN.
Why is a TRN essential in the UAE?
TRN is a distinguishing factor that endows a business with a unique identity. This number is required for all interactions of a firm with the FTA.
A TRN helps track all the transactions of a firm. Without a TRN it will also not be possible to receive a tax refund on the VAT.
You can also only charge VAT once you are registered and possess a TRN number. It also qualifies a company for a VAT credit when possible.
TRN for a group VAT registration
If there are multiple companies under a single ownership, they can all be registered under the parent company in a group VAT registration and share a common TRN. This also simplifies the entire process and lowers the administrational burden. Under group VAT registration, the transactions between the entities within the group can be VAT free.
Process for obtaining a TRN
The companies that need to register for VAT mandatorily can get assistance from tax experts to register themselves and obtain a valid TRN from the FTA. This needs to be carried out by qualifying companies within 3-days of being compelled to do so.
Step 1 to obtain TRN- Register the company on the online portal of FTA. This process can be carried out by tax experts on the company's behalf.
Step 2 – Once registration is done, in the next step by clicking a button you need to move onto the page where you provide all the required VAT information related to your company. This step too can be done by your tax team.
Step 3- Filling out all required information accurately in the 8 different sections.
Step 4- Once all information is filled in, you can submit it for approval. This step completes your application for VAT registration and your company will be allotted a TRN certificate if all details provided are approved.
Documentation required for VAT Application
There are a standard set of documents of which you need soft copies ready to be uploaded onto the FTA’s online portal. The entire process is done online and does not require any physical visits to any government organization. The only difference in the documentation required may arise due to a specific industry, type of business or other factors.
The general set of documents includes-
The trade license copy of the company
The copies of the company owner’s and partner’s passports and emirates IDs
The firm’s up-to-date address and contact information.
The Memorandum of Association(MOA) of the firm