What businesses should do before registering for VAT in the UAE?
Embed VAT in your business plan
Start-ups and newly established businesses must embed the VAT into their business plan, strategies, policies, and processes. It is essential that they well understand the implications of the VAT and make every effort to align their business model to the Federal Tax Authority (FTA) compliance requirements.
Bookkeeping is essential for businesses to calculate the VAT registration threshold, and it is required by VAT regulations even if your business is not yet registered for tax.
Maintain your accounting records and all supporting documentations. This will help you to assess your registration threshold at end of each month (a historical test for the last 12 months).
Bookkeeping will organize your records to taxable, non-taxable, exempt, zero-rated and so on. It will also help you if you are eligible to recover any VAT paid on purchases prior to the VAT registration.