VAT Advisory

When taxable supplies and imports exceed AED 375,000 over the past 12 months, or are expected to exceed that figure within the next 30 days. The FTA's published mandatory threshold is AED 375,000 and the application must be submitted within 30 days of becoming liable; the FTA states the threshold does not apply to foreign businesses, which are registered from the date they start making supplies in the UAE. Voluntary registration is open once taxable supplies, imports or taxable expenses exceed AED 187,500. Applications are made on EmaraTax, are free, and the FTA's stated processing time is 20 business days from a complete application. We fix the right registration date with you, because registering late means accounting for VAT on supplies made before registration.

Sources: Federal Tax Authority — Value Added Tax (VAT) Registration (service card); Federal Tax Authority — VAT Topics – Registration For VAT (accessed 24 October 2026)

The standard rate is 5%, in force since 1 January 2018. Zero-rated supplies under Article 45 of Federal Decree-Law No. 8 of 2017 include exports of goods and services, international transport, the first sale or rent of residential buildings, certain investment precious metals and specified healthcare and education services; the supplier charges 0% but can still recover input tax. Exempt supplies under Article 46 — financial services including life insurance, residential buildings other than the zero-rated first supply, bare land and local passenger transport — carry no VAT, and the supplier cannot recover VAT on the costs of making them. The distinction drives your recovery position, so we map every revenue line to the right category.

Sources: UAE Government portal (u.ae) — Register for VAT; UAE Government portal (u.ae) — Guidance on Zero-Rated and Exempt Supplies (accessed 24 October 2026)

Quarterly for most businesses, monthly for the largest. The Executive Regulation of Federal Decree-Law No. 8 of 2017 (Cabinet Decision No. 52 of 2017, as amended) sets the standard tax period at three calendar months, and the UAE Government portal explains that the FTA assigns quarterly periods to businesses with annual turnover below AED 150 million and monthly periods at AED 150 million or more. The return must reach the FTA, and the tax must be paid, by the 28th day after the end of the tax period. Filing is electronic through EmaraTax. Where recoverable input tax exceeds output tax, the excess can be reclaimed. We run a filing calendar for each client and reconcile the return to the ledgers before submission.

Sources: Federal Tax Authority — Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax (Cabinet Decision No. 52 of 2017 and its amendments); UAE Government portal (u.ae) — File VAT returns (accessed 24 October 2026)

Late registration costs AED 10,000. A late return costs AED 1,000 the first time and AED 2,000 if repeated within 24 months. Late payment attracts 14% per annum, charged monthly on the unpaid tax from the day after the due date — this replaced the previous regime when Cabinet Decision No. 129 of 2025 amended Cabinet Decision No. 40 of 2017 with effect from 14 April 2026. Failing to keep required records costs AED 10,000 (AED 20,000 if repeated within 24 months), and failing to issue a tax invoice or tax credit note within the legal period costs AED 2,500 per detected case. We treat the 28th-day deadline as fixed and build in time for payment to clear.

Sources: Ministry of Finance — Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE, and its amendments; Federal Tax Authority — Federal Tax Authority Announces Entry into Force of the Decision Amending Administrative Penalties Imposed for Violations of Tax Legislation and Calls on Registrants to Benefit from the Advantages of the New Decision (accessed 24 October 2026)

In phases from 1 January 2027. The Ministry of Finance's September 2025 decisions bring all business-to-business and business-to-government transactions into the electronic invoicing system. Businesses with annual revenue of AED 50,000,000 or more must implement it from 1 January 2027; the Ministry extended their deadline for appointing an Accredited Service Provider from 31 July 2026 to 30 October 2026 but confirmed in May 2026 that the 1 January 2027 start is unchanged. Businesses below AED 50,000,000 must appoint a provider by 31 March 2027 and implement from 1 July 2027; government entities follow on 1 October 2027. A pilot began on 1 July 2026. We check your revenue band, select the provider and align your invoicing data with the mandatory fields.

Sources: Ministry of Finance — Ministry of Finance Announces the Issuance of Two Ministerial Decisions on the Scope of Obligations and the Timelines for Implementing the Electronic Invoicing System; Ministry of Finance — Ministry of Finance announces targeted amendments to eInvoicing system decisions (accessed 24 October 2026)

Yes. Where recoverable input tax for a period exceeds the output tax due, the Executive Regulation allows the excess to be repaid, or you may carry it forward as a credit against future returns. The refund is requested on EmaraTax through the FTA's refund service for registered taxpayers (form VAT311) with an output and input tax report and the supporting tax invoices. The service is free; the FTA's stated processing time is 25 business days from a complete application, extending to 55 working days where the FTA's audit team needs to investigate, with a further 25 business days if additional documents are requested. We prepare the refund file so the invoices reconcile to the return and answer FTA queries on your behalf.

Sources: Federal Tax Authority — Tax Refund to Registered Tax Payers (service card); Federal Tax Authority — Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax (Cabinet Decision No. 52 of 2017 and its amendments) (accessed 24 October 2026)

Within 20 business days of the triggering event. Article 14 of the Executive Regulation requires a registrant to apply for deregistration within 20 business days where it stops making taxable supplies and does not expect to make any in the next 12 months, or where its taxable supplies and taxable expenses over the previous 12 months fell below the voluntary threshold of AED 187,500 and are not expected to exceed it in the next 30 days. A late application costs AED 1,000 a month up to a maximum of AED 10,000 under Cabinet Decision No. 40 of 2017 as amended. A final return is still due for the last period. We handle deregistration alongside a liquidation or licence cancellation so the two do not fall out of step.

Sources: Federal Tax Authority — Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax (Cabinet Decision No. 52 of 2017 and its amendments); Ministry of Finance — Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws in the UAE, and its amendments (accessed 24 October 2026)

Generally no. A free zone licence does not by itself change your VAT position; registration thresholds, returns and penalties apply as for any UAE business. The exception is a Designated Zone — a zone named in a Cabinet decision that is a fenced area with customs controls on goods and people, keeps internal procedures for storing and processing goods, and whose operator follows FTA procedures. Under Article 51 of the Executive Regulation such a zone is treated as outside the UAE for specified goods transactions, and goods moved between Designated Zones are not taxed if they are not released or altered in transit. If a zone breaches those conditions it is treated as inside the State. We confirm your zone's status before you rely on it.

Source: Federal Tax Authority — Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax (Cabinet Decision No. 52 of 2017 and its amendments) (accessed 24 October 2026)