What is VAT in the UAE?
Value Added Tax is an indirect tax applied to many goods and services in the UAE. The standard rate is 5%, with some supplies treated as zero-rated or exempt depending on the law and supporting documentation.
VAT registration thresholds
Businesses generally need to monitor taxable supplies and imports against two key thresholds: AED 375,000 for mandatory registration and AED 187,500 for voluntary registration. If your revenue is growing quickly, check this before the threshold is crossed.
VAT return filing
VAT-registered businesses usually need to file VAT returns for assigned tax periods. A good filing process reconciles sales, purchases, import VAT, credit notes, adjustments and previous return balances.
Common VAT risks
- Missing registration deadlines after crossing the threshold
- Claiming input VAT without valid tax invoices
- Incorrect treatment of exports, free zone supplies or exempt revenue
- Late VAT return filing or late payment
- Poor recordkeeping before an FTA document request
When to speak with a VAT consultant
Speak with a VAT consultant when registering for VAT, filing late returns, claiming refunds, changing business activity, handling imports or exports, receiving an FTA notice, or preparing for deregistration.
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