Since the introduction of VAT in the UAE in January 2018 at a standard rate of 5%, businesses have been required to register with the Federal Tax Authority (FTA). Our VAT experts provide end-to-end registration, filing, and compliance services to keep your business on the right side of UAE tax law.
Value Added Tax (VAT) is an indirect tax levied on the supply of goods and services at each stage of the supply chain. The UAE introduced VAT at a standard rate of 5% as part of its commitment to the GCC VAT framework. Businesses registered for VAT must charge VAT on their taxable supplies and can recover VAT incurred on their business expenses.
VAT is collected by businesses on behalf of the government and must be remitted to the FTA through regular tax return filings.
Even if your business is below the mandatory registration threshold, you may choose to register voluntarily. This can be beneficial if you have significant business expenses and wish to recover the VAT incurred, or if you deal with VAT-registered suppliers who prefer to transact with other registered entities.
Once registered, businesses must submit VAT returns to the FTA on a quarterly basis. Each return must be filed within 28 days of the end of the tax period. Our team handles the entire process:
Gather all sales and purchase invoices
Match input and output VAT
Submit return via FTA portal
Make payment within the deadline
The FTA imposes strict penalties for non-compliance. Avoid these costly fines with our expert guidance:
Businesses with taxable supplies exceeding AED 375,000 per annum must register for VAT with the FTA. Our business setup team ensures a smooth registration process, from document preparation to FTA portal submission.
Businesses with taxable supplies between AED 187,500 and AED 375,000 can opt for voluntary VAT registration. This is beneficial for recovering input VAT on expenses. Learn more about corporate tax compliance alongside VAT.
VAT-registered businesses must file returns quarterly within 28 days of the period end. Our team manages the complete filing cycle, from invoice reconciliation to FTA submission. We also offer PRO services for additional compliance support.
Our VAT services Abu Dhabi team provides end-to-end support for all your VAT compliance needs, including registration, filing, audit defence, and advisory. Contact us for a free consultation.
Any business with taxable supplies exceeding AED 375,000 per annum must register for VAT. Businesses with supplies between AED 187,500 and AED 375,000 may register voluntarily. Non-resident businesses making taxable supplies in the UAE must also register irrespective of threshold.
The standard VAT rate in the UAE is 5%. Certain supplies may be zero-rated (e.g., exports, international transport, certain healthcare and education) or exempt (e.g., residential property sales, certain financial services). Our team can help determine the correct treatment for your supplies.
VAT returns must be filed quarterly within 28 days of the end of each tax period. For example, if your tax period ends on 31 March, the return is due by 28 April. Late filing incurs penalties of AED 1,000–4,000 per return.
Yes, VAT-registered businesses can recover input VAT incurred on goods and services used for making taxable supplies. Input VAT on certain expenses (e.g., entertainment, luxury vehicles) may be restricted. Proper invoicing and record-keeping are essential for recovery.
The FTA imposes penalties including AED 20,000 for failure to register, AED 1,000–4,000 per late return, 2%–14% on late payments, and up to AED 1,000,000 for tax evasion. Corporate tax penalties follow a similar enforcement framework.
Yes, you can apply for VAT deregistration if your taxable supplies fall below the voluntary threshold (AED 187,500) and you do not expect them to exceed this in the next 12 months. You must file a final return and settle any outstanding tax within 20 business days of deregistration.
Still have questions? Contact us for expert guidance on your VAT obligations.
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