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What is a TRN Number?
TRN stands for Tax Registration Number. The FTA – Federal Tax Authority issues TRN number specifically to businesses registering themselves for VAT. A company is required to subscribe for a mandatory VAT registration when their VAT taxable goods and services exceed AED 375,000/- annually.
The TRN Number is a unique number that consists of 15 digits (Numeric) and is assigned when the businesses register themselves for VAT in the UAE. This number by law needs to be mentioned on the tax invoices, Credit notes, VAT returns, and other Tax-related documents issued by a particular entity. The TRN allows businesses and even the general public to perform a TRN check to identify the authenticity of a business operating as a tax registered business in the region.
VAT verification, commonly known as TRN verification, has become significantly important. Why? I would rather say, Why not? Suppose we consider the aspects of potential frauds that are particularly associated with value-added tax (VAT)., In that case, we may arrive at a mutual point on how important it is to have a TRN verification.
Unfortunately, you won’t find honest people in this world, especially in the commercial sectors and market region. You should know that lawbreaker can apparently charge you VAT on purchases using a ‘FAKE’ TRN and can utilize the same money for their personal use or probably for business purposes.
So basically, looking at a broader picture, this money is pocketed, eventually causing a loss of income to the Government. Isn’t this unethical and a fraudulent gesture?
In our comprehensive guide, we will look into the steps involved to verify TRN in UAE and how you could trust the transaction when paying the VAT on purchases from various outlets. We would also look into the areas of procedures to be followed for the TRN registration in the UAE.
Since now we have learned that under the UAE VAT laws, TRN is abbreviated to ‘Tax Registration Number’, we should also understand that TRN is a distinctive number issued by the FTA- Federal Tax Authority to a VAT registered businesses.
The Importance of TRN
The significance of a valid Tax Registration Number:
According to the UAE VAT laws, it has been strictly emphasized to follow the law with regards to the statement of the Tax Registration Number on the issued invoices and related documents to the customers/consumers by the registered businesses in UAE. These VAT-related documents could be:
- A tax invoice
- A tax Credit Note
- VAT return
Any other relevant document that may require to specify TRN as per the UAE VAT laws
The TRN is a 15 digit number that distinguishes the registered business from that of others. Besides, the taxpayer or tax registered business with a valid TRN can only charge VAT to its customers through issued invoices.
A Tax Registration Number also enables easy communication between suppliers and buyers while preparing the necessary documents of the transaction such as contract, invoice and more.
Why is TRN verification immensely necessary?
The drawbacks of a Fake TRN Number
The verification of TRN plays an essential role in the business world, which is to ensure that the business operating in the region is a tax registered business and is eligible to charge VAT.
Before making a transaction with an organization, TRN verification process provides confidence in the transaction with the particular business. It helps you remain assured that the tax invoice issued to the customers is genuinely based on the tax registration.
So, what have we just learned here? An FTA TRN verification provides credibility and genuineness of the business claiming to be a VAT registered business. The certification of FTA’s TRN makes it certain that it is in line and compliant with the provisions of Tax/VAT laws of UAE. Furthermore, it ensures that the tax paid on purchases of goods and services are authentic and save yourself from any potential loss of input tax credit.
TRN Verification Steps
How to possibly carry out a TRN Check?
Initially, when the VAT was launched in the UAE, it enabled only the registered businesses to perform the TRN check on the FTA’s portal. While, now even the general public has absolute access to perform a TRN check on the same portal, allowing them to verify if the business is genuinely registered for VAT. TRN check exercise can be performed through these Easy steps:
- Visit the FTA’s website for TRN verification
- State the TRN of the supplier in the space provided
- Enter the Security Code in the text box as displayed on the screen
- Validate the code
- Lastly, the web page will display the legal name of all the organization entity registered with the same TRN as a part of the tax Group,
provided that the TRN is a valid one. The entity’s name is displayed in English and Arabic.
Through the above-stated steps of TRN check, one can compare, check and analyze the information on the tax invoice or credit note received by a particular retailer or business. The portal generates the exact business name found on the documents and identifies any discrepancies if the TRN is fake.
Procedures to be followed to register for TRN in UAE:
The official portal of Federal Tax Authority is maintained for businesses to register for VAT in UAE. So, what are the crucial steps involved in creating a Tax registered business through the official portal of FTA?
First and foremost, individual business or an entity needs to create an e-service account and complete the registration through the form provided on the web page. Once the form is submitted and process completed, TRN is generated under the UAE VAT laws, and the same is delivered to the user.
Quick Questions related to TRN verification answered for a better and easier understanding of the businesses in the region as well General Public.
TRN is a unique 15- digit number generated when a business is registered for VAT in UAE.
Yes, it’s quite straightforward! Just follow the four basic steps, as stated below:
- Visit the FTA official portal
- Enter the TRN number in the text box
- Validate the Captcha Code
- The business’s legal name in Arabic and English is displayed
Compare it with the document/invoice/credit note you have. And you are done, yes that’s all about the TRN verification!
The TRN issued by FTA is a unique 15-digit number, a VAT registration number that is issued to the registered businesses in UAE. However, any discrepancy in the TRN number could be due to a human error which is either intentionally or unintentionally. Still, it should be addressed immediately right after encountering the error in the first place.
You may contact the supplier and escalate the concern which could be rectified, and further for your own satisfaction, you may visit the same website to verify the TRN’s credibility.
Yes, it is certainly possible to link your TRN with Dubai Custom Department, doing so would allow you (tax registered business) to settle the transactions of imported goods and that too without paying any VAT at the Customs office. However, the VAT shall be paid at the time of filing the VAT return.
There are three ways available to link your TRN with Dubai customs:
- You may update your customs registration number to the FTA portal
- You can file the Import Declaration Form
- You may update your TRN number through via customs department.
Yes, it is required to state the Tax Registration Number in the VAT returns that tax registered business files with the FTA.
Yes, consequences could be such that the input tax paid by you might be going to the wrong place. Also, if the TRN verification is not performed, you may not get the tax credit for the purchases made by you in case of a fake registered supplier. Therefore, it is always recommended to carry out a VAT Verification exercise to avoid such situations.
A tax clearance certificate can be acquired from the Federal Tax Authority, which is available through one of their services. FTA issues Tax Clearance Certificate to the tax registered businesses when the taxpayer applies through the FTA’s portal services. Tax clearance certificate can be used for various purposes such as:
- Change of Ownership
- Business Closure
- Below Voluntary Threshold
- Below Mandatory Threshold