VAT in the UAE
VAT in the UAE is 5 %, with the exception of some goods and services which have a 0 % VAT rate. This is an indirect tax paid by consumers. Taxes are collected at every stage of the sale process. Registered companies must collect VAT and file a report with government tax authorities.
- Dubai
- Abu Dhabi
- Sharjah
- Ajman
- Umm Al Quwain
- Ras Al Khaimah
- Fujairah
Value added tax (VAT) is an indirect tax paid by consumers for goods and services. VAT is collected by registered businesses who then must report it to the government.
The amount of VAT in the UAE is 5 % and is applied to all stages of the process of selling goods and services. For example, a manufacturer sells their product to a wholesaler, and charges them 5 % VAT on top of the cost of the goods. The wholesaler then resells the product to a retailer, again adding 5 % VAT to the retailer’s price for the goods. Finally, the retailer resells the product to the consumer with yet another 5 % VAT on the final cost of the goods. Each seller in this process gets a refund (tax credit) of the VAT paid.
Goods and services that have a zero VAT rate
- those that are exported outside the UAE
- international transportation
- certain types of goods for the health and education industries
- certain types of precious metals that are used as investment assets
- residential property
- undeveloped land
- public transportation services
- life insurance services
- certain financial services
Additionally, some goods may not be subjected to VAT if the transactions were carried out between companies registered within the free economic zones. As for services conducted within the free economic zones, the 5 % VAT rate still applies.
Voluntary and obligatory registration of companies to pay VAT
Companies are required to register to pay VAT if the total value of their taxable sales and imports in the UAE meets or exceeds AED 375K (USD 102K) in either the past 12 months or the past 30 days. If the amount is equal to or higher than AED 187.5K (USD 51K), then registration for VAT is voluntary. The same goes for start-ups and small businesses whose total taxable sales and imports are AED 187.5K (USD 51K) and above - registration is on a voluntary basis, though they will receive a tax credit if they do register.
Once a company is registered for VAT, a legal entity must keep tax credit and debit invoices. Accounting records must be kept for a minimum of 5 years from the date of the transaction.
In order to avoid fines from the Federal Tax Authority (FTA), it is very important to correctly determine the rate that will be applied to the company's activities.
- 01
Corporate tax in the UAE
Individuals and legal entities that constantly conduct industrial, commercial and other types of activities in the UAE are subject to corporate tax.
Learn more - 02
Custom duties in the UAE
Customs duties in the UAE are 5 % of CIF. Commercial goods are subject to customs duties. Some goods can be taxed as high as 100 %.
Learn more - 03
Accounting Services & Tax Accounting
Using our accounting services will help you get the desired result without the unnecessary obligations.
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The first company in the group, was established in 2008. We provide advisory and operational support for entrepreneurs, investors, and companies entering or operating in the UAE. Our expertise covers business structuring, corporate support, legal and tax advisory, as well as residency and investment-related consulting. With offices in Dubai and Sharjah, we work with clients worldwide, offering a discreet, structured, and long-term approach.
All services are provided as private advisory and assistance. We do not represent government authorities and do not issue official documents.
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