VAT Registration & Compliance in UAE
Reviewed by the Commoner Law Editorial Team. Sourced from UAE federal decrees, laws, and ministerial decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
The UAE charges Value Added Tax (VAT) at 5% on most goods and services — one of the lowest VAT rates in the world:
- Mandatory registration: If your taxable supplies exceed AED 375,000 in 12 months (or you expect them to in the next 30 days), you must register for VAT with the FTA.
- 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, newly constructed residential property (first supply), and some healthcare and education services.
- Exempt supplies: Some items are fully exempt from VAT, including certain financial services, bare land, local passenger transport, and residential property (subsequent supplies).
- Filing: VAT returns must be filed quarterly (or monthly for large businesses) through the FTA's EmaraTax portal. The due date is 28 days after the end of each tax period.
When does it apply?
- You run a business in the UAE that sells goods or services — whether on the mainland or in a free zone.
- Your annual taxable turnover exceeds the mandatory or voluntary thresholds.
- As a consumer, you pay 5% VAT on most purchases — it should be shown separately on tax invoices.
What to Do If Your UAE Business Has Reached the VAT Registration Threshold
- Monitor your revenue — register for VAT through EmaraTax as soon as you reach the AED 375,000 threshold.
- Issue proper tax invoices with your TRN, the VAT amount, and the total — a simplified tax invoice is acceptable for sales under AED 10,000.
- File your VAT returns on time through EmaraTax or the FTA smart app and pay any VAT due by the 28th of the month following the end of your tax period.
- Keep all invoices and records for at least 5 years — the FTA can audit this period.
What should you NOT do?
- Do not charge VAT without being registered — this is illegal and can result in significant fines.
- Do not miss filing deadlines — late filing penalties start at AED 1,000 for the first offence and AED 2,000 for repeat offences within 24 months.
- Do not collect VAT and fail to remit it to the FTA — this is a serious offence that can lead to fines of up to 300% of the unpaid tax plus potential criminal prosecution.
Common Questions
When does it apply — vat registration & compliance?
You run a business in the UAE that sells goods or services — whether on the mainland or in a free zone.Your annual taxable turnover exceeds the mandatory or voluntary thresholds.As a consumer, you pay 5% VAT on most purchases — it should be shown separately on tax invoices.
What should I do if my business in the UAE has exceeded the VAT registration threshold?
Monitor your revenue — register for VAT through EmaraTax as soon as you reach the AED 375,000 threshold.Issue proper tax invoices with your TRN, the VAT amount, and the total — a simplified tax invoice is acceptable for sales under AED 10,000.File your VAT returns on time through EmaraTax or the FTA smart app and pay any VAT due by the 28th of the month following the end of your tax period.Keep all invoices and records for at least 5 years — the FTA can audit this period.
What should you NOT do — vat registration & compliance?
Do not charge VAT without being registered — this is illegal and can result in significant fines.Do not miss filing deadlines — late filing penalties start at AED 1,000 for the first offence and AED 2,000 for repeat offences within 24 months.Do not collect VAT and fail to remit it to the FTA — this is a serious offence that can lead to fines of up to 300% of the unpaid tax plus potential criminal prosecution.