VAT Registration

VAT in UAE: Find the Best VAT Consultants in Dubai

VAT (Value Added Tax) is a tax on the consumption or use of products and services charged at each point of sale. VAT is a form of indirect tax and is collected in more than 180 countries around the globe. A 5% tax rate VAT was introduced in the United Arab Emirates in January 2018. VAT implementation in the UAE is governed by the Federal Tax Authority FTA.

Many owners of businesses in the UAE are still struggling with VAT formalities. By failing to register as per threshold, missing deadlines in filing VAT returns, and making a few VAT miscalculations you might be opening yourself to fines.

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VAT landscape is not that complicated when you have the right guidance. To understand it more, here are some points that you need to know with the VAT registration in UAE:

  • VAT Rate

    The standard VAT rate in the UAE is 5%, which applies to most goods and services. Some goods and services are specifically exempted or subject to a zero-rate.

  • Tax Registration

    Businesses meeting certain turnover thresholds are required to register for VAT with the Federal Tax Authority (FTA). The mandatory registration threshold for VAT in the UAE is AED 375,000. This means the taxable supply of goods and imports exceed the mandatory registration threshold within the previous 12 months or are expected to exceed in the next 30 days. Businesses can still opt to register voluntarily if their taxable supplies and imports exceed the voluntary registration threshold of AED 187,500. Registration enables businesses to charge VAT on taxable supplies and reclaim VAT paid on their purchases.

  • Taxable Supplies

    VAT applies to a wide range of goods and services such as commercial sales, imports, leases, and professional services.

  • VAT Exemptions

    There are certain exemptions from VAT, including essential food items, education, healthcare services, local transport and residential real estate.

  • Zero-Rated Goods and Services

    Some goods and services are charged at 0% VAT. Zero-rated items include exports,certain healthcare and educational services, international transportation, and investment-grade precious metals.

  • Input Tax Credit

    Registered businesses can claim Input Tax Credit (ITC) for VAT paid on their purchases, provided the expenses are incurred for business purposes and meet specific criteria outlined by the FTA.

  • VAT Returns

    Registered businesses are required to submit VAT returns regularly with details of taxable supplies, input tax, and output tax for a given period. The deadlines for VAT return filing are mentioned in the VAT Certificate issued to any business.

  • VAT Penalties and Compliance

    It is essential for businesses to maintain accurate records and adhere to VAT requirements to avoid any legal repercussions.Non-compliance with VAT regulations may result in penalties and fines.

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Some free zone business formations are exempt from VAT. These free zones are also known as designated zones. VAT-free designated free zones are areas within the UAE that enjoy specific tax benefits, including exemptions or special treatment under the VAT regulations. These zones play a crucial role in attracting foreign investment, fostering economic growth, and promoting international trade.

It is important to be in touch with a tax consultant to get a better understanding of the VAT laws and VAT compliance in order to avoid possible penalties. IsraEmiratesLink offers VAT consultancy services in Dubai.

Book your VAT consultation services now