Contact us

Value Added Tax (FAQ)

Have Questions About Value Added Tax in the United Arab Emirates? Get Your Answers Here.

Get In Touch
30+
Professional Team
499+
Happy Clients
1,500+
Cases Completed
10+
Years of Experience

FAQ

VAT, or Value Added Tax, is a consumption tax imposed on the supply of goods and services in the UAE. It was introduced on January 1, 2018, at a standard rate of 5%.
Businesses must register for VAT if their taxable supplies exceed AED 375,000 over the past 12 months. Voluntary registration is available for those whose supplies exceed AED 187,500.
Certain sectors, such as healthcare, education, and specific basic consumer goods, are exempt from VAT.
VAT returns must be submitted electronically through the Federal Tax Authority (FTA) portal. The submission is typically required on a quarterly or annual basis, depending on the business’s VAT registration category.
The reverse charge mechanism shifts the VAT liability from the supplier to the recipient in certain cases, particularly for imports. In such instances, the recipient must register and account for the VAT.
Yes, businesses can claim VAT refunds for eligible expenses and input tax. The process involves submitting a refund application to the FTA.
Yes, the mandatory registration threshold is AED 375,000 in taxable supplies over the past 12 months.
Exempt supplies are not subject to VAT at all, while zero-rated supplies are taxable but charged at 0%, allowing businesses to reclaim input VAT.
A tax invoice is a document that includes specific details about the supply of goods or services, such as the amount of VAT charged. It must meet the requirements set by the FTA.
Non-compliance can result in significant penalties, including fines up to five times the tax amount due and potential imprisonment for serious violations.
Businesses can seek help from VAT consultants who provide advisory services, assist with registration, filing returns, and ensure overall compliance with VAT regulations.
VAT is calculated by applying the 5% rate to the taxable supply of goods and services. For example, on a sale of AED 100, the VAT would be AED 5.
If a deadline is missed, businesses should file as soon as possible and may incur penalties. It’s essential to rectify any non-compliance promptly.
The frequency of VAT return submissions depends on your business’s taxable turnover and registration status, typically quarterly or annually.
A VAT Group allows two or more related entities to register for VAT as a single taxable person, simplifying compliance and reporting.

Generally, VAT is applicable only to services provided within the UAE, though certain services may be treated differently depending on the circumstances.

Have a question? Get in touch today

To date we are providing Accounting Services for more than 250 clients
across the UAE in Trading, Construction, Real estate, Healthcare, Logistics and other services.

Contact Us