VAT in the UAE, handled end to end.
Value Added Tax

VAT in the UAE, handled end to end.

The UAE charges 5% VAT on most goods and services. Registration is mandatory above AED 375,000 of taxable supplies and returns are usually quarterly. ZS registers you, sets up compliant accounting, files every return on time and represents you before the FTA as an approved Tax Agency.

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5%Standard rate since 1 January 2018
AED 375kMandatory registration threshold
28 daysReturn deadline after period end

Key facts

  • UAE VAT was introduced on 1 January 2018 at a standard rate of 5%, with zero rated and exempt categories for exports, certain healthcare, education, residential property and financial services.
  • Registration is mandatory when taxable supplies and imports exceed AED 375,000 in the past 12 months or the next 30 days, and voluntary above AED 187,500.
  • VAT returns are filed on EmaraTax, usually quarterly, and the return and payment are due 28 days after the end of the tax period.
  • Businesses must keep VAT records for five years and issue compliant tax invoices, and penalties apply to late registration, late filing and incorrect returns.
  • ZS is an FTA approved Tax Agency and provides registration, return filing, refunds, accounting procedures and transaction advice across the UAE.

VAT services we provide

ZS has advised on UAE VAT since the law was introduced in 2018. Our VAT practice covers the full cycle, and each service is also described on its own page:

How VAT works in the UAE: 5% VAT collected at each stage of the supply chain and borne by the end consumer
VAT is collected at every stage of the chain; the end consumer bears the cost.

Applicability: who must register for VAT in the UAE

A business must register when the value of its taxable supplies and imports in the previous 12 months exceeds AED 375,000, or is expected to exceed it in the next 30 days. Voluntary registration is available above AED 187,500 of taxable supplies or taxable expenses, which suits start ups with significant input VAT. Non resident businesses making taxable supplies in the UAE must register regardless of threshold. Deregistration is required when supplies fall below the voluntary threshold and permitted when they fall below the mandatory threshold.

VAT rates, zero-rated supplies and areas exempted from VAT

CategoryRateExamples
Standard rated5%Most goods and services, commercial property, hotel stays
Zero rated0%Exports, international transport, first supply of residential property within three years, certain healthcare and education, precious metals
ExemptNo VAT, no input recoveryResidential lettings, bare land, local passenger transport, certain financial services
Out of scopeNoneSupplies outside the UAE, transfers of a going concern, some designated zone movements

How return filing works

Most registrants file quarterly, and larger businesses monthly, through EmaraTax. Each return reports standard rated supplies by emirate, zero rated and exempt supplies, imports under reverse charge, and recoverable input VAT. The return and any payment are due 28 days after the end of the period. We reconcile the return to the general ledger every period so that the figures can be defended in an FTA audit.

Common VAT mistakes we fix

  • Recovering input VAT on blocked expenses such as entertainment and certain motor vehicles
  • Applying the reverse charge incorrectly on imported services
  • Treating designated zone supplies as automatically out of scope
  • Issuing invoices that miss mandatory fields, which invalidates the customer's recovery
  • Late registration after crossing the threshold, which triggers penalties and back dated VAT

See our article on common VAT compliance mistakes for the full list.

What is included

What the service covers.

Registration

Mandatory and voluntary registration, tax groups and deregistration on EmaraTax.

All VAT services

Return filing

Quarterly or monthly returns reconciled to the ledger and filed before the 28 day deadline.

Return filing

Implementation

Systems, invoice formats, tax codes and staff training for new registrants.

Implementation plans

Accounting procedures

Controls that make every return defensible in an FTA audit.

Accounting procedures

Transaction advice

Correct treatment of exports, imports, property, designated zones and mixed supplies.

Transaction advising

FTA representation

Refund claims, audits, clarifications and voluntary disclosures handled by an approved Tax Agency.

VAT consultant
FAQ

Questions we hear every week.

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What is the VAT registration threshold in the UAE?

Registration is mandatory when taxable supplies and imports exceed AED 375,000 in the previous 12 months or the next 30 days. Voluntary registration is available above AED 187,500 of taxable supplies or expenses.

When are VAT returns due?

The return and payment are due 28 days after the end of the tax period. Most businesses have quarterly periods; some are assigned monthly periods by the FTA.

Can I recover VAT on all business expenses?

No. Input VAT is recoverable on expenses used for taxable supplies, provided you hold a valid tax invoice. It is blocked on entertainment, on motor vehicles available for personal use and on expenses related to exempt supplies.

How do I claim a VAT refund?

If input VAT exceeds output VAT in a period, the excess can be carried forward or claimed as a refund through EmaraTax. The FTA reviews refund claims and may request invoices and evidence, which is where reconciled records matter.

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