What is Commercial Activities Certificate under UAE VAT Law?
The Federal Tax Authority (FTA) has recently started issuing the tax-related certificates including commercial activities certificates which were previously issued by the Ministry of Finance, UAE. Since FTA has all the details of the VAT registered individuals and corporates, this change has made the process of obtaining the Commercial Activities Certificate more efficient.
What is meant by Commercial Activities Certificate?
The Commercial Activities Certificate, which is otherwise referred to as the Certificate of Status of Business or Business Person, enables the holder of the certificate to get a refund of advance VAT paid if any. In many scenarios, business transactions outside the UAE may demand payment of VAT in advance. For the parties who are involved in such transactions, the Commercial Activities Certificate will help them to claim the refund of such advance tax paid.
What are the benefits of obtaining Commercial Activities Certificate?
Advantages of tax certificates including Commercial Activities Certificate are mainly applicable to the parties involved in cross border transactions. Such certificates enable the ones who hold them to take advantage of the international tax treaties between the countries like the Double Taxation Avoidance Agreements (DTAA) to prevent the incurrence of repeated tax charges over the same supply. Additionally, the Commercial Activities Certificate helps to gain a refund of the advance of VAT paid in international transactions in a country outside UAE, even if DTAA is not available.
What are the procedures involved in obtaining Commercial Activities Certificate?
FTA’s online portal has the facility that allows its registered account holders to apply for the Commercial Activities Certificate. So if you are trying to obtain a Commercial Activities Certificate, firstly you have to register in the FTA portal and open a tax certificate account. Once you get the credentials for the account, you will have to log in to the FTA portal and you can find in the dashboard of the main page, the link to create the request for the certificate. The applicant can fill in the details of the request form and pay the applicable fees online. Once the request form is processed and payment of fees is made, the applicant will be able to download the Commercial Activities Certificate. The certificate may be password protected which can be opened with a password as instructed in the portal.
Documents required to obtain Commercial Activities Certificate
It is to be noted that the applicant for the Commercial Activities Certificate should be done VAT registration and should have a valid TRN number. Also, a copy of the trade license for the business of the applicant and a signed and stamped request letter from the applicant are the mandatory documents to be kept ready before applying for the Commercial Activities Certificate.
CDA in obtaining Commercial Activities Certificate
We are providing one-hour free consultation, where our experienced professionals can share with you insightful thoughts on various tax and accounting subjects clarifying your queries in these matters. CDA has competent tax experts who can assist you in your tax-related activities such as tax registration, correspondences with FTA, obtaining certificates, determining tax treatments, tax accounting, formatting tax invoices, preparing tax returns, calculation of outstanding tax, filing of tax returns, tax record maintenance, periodic tax reviews, compliance checks, understanding the recent developments in tax regulation, arranging training sessions for employees, tax planning, assessing the impact of tax on cash flows, compiling tax policies and procedures, ensuring adequate internal controls in tax-related processes, tax system implementation, preparing files for FTA audits and more such functions ensuring compliance with the tax rules.
This brings us to the conclusion of the discussion on commercial activities certificates under UAE VAT law. Do you need help in obtaining a Commercial Activities Certificate? Feel free to contact CDA.