VAT Registration & Compliance
Written in plain language for general understanding. This is educational content, not legal advice. Based on UAE federal decrees, laws, and ministerial decisions.
UAE Federal Law
What is this right?
The UAE charges Value Added Tax (VAT) at 5% on most goods and services:
- Mandatory registration: If your taxable supplies exceed AED 375,000 in 12 months, you must register for VAT.
- Voluntary registration: If your taxable supplies exceed AED 187,500, you may choose to register.
- Zero-rated supplies: Some goods and services are taxed at 0%, including certain exports, international transport, and some healthcare and education services.
- Exempt supplies: Some items are fully exempt from VAT, including certain financial services, bare land, and local passenger transport.
- Filing: VAT returns must be filed quarterly (or monthly for large businesses) through the FTA's EmaraTax portal.
When does it apply?
- You run a business in the UAE that sells goods or services.
- Your annual taxable turnover exceeds the mandatory or voluntary thresholds.
- As a consumer, you pay 5% VAT on most purchases.
What should you do?
- Monitor your revenue — register for VAT as soon as you reach the AED 375,000 threshold.
- Issue proper tax invoices with your TRN, the VAT amount, and the total.
- File your VAT returns on time and pay any VAT due by the deadline shown on your return.
- Keep all invoices and records for 5 years minimum.
What should you NOT do?
- Do not charge VAT without being registered — this is illegal.
- Do not miss filing deadlines — late filing penalties start at AED 1,000 for the first offence and AED 2,000 for repeat offences.
- Do not collect VAT and fail to remit it — this is a serious offence that can lead to heavy fines.
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