VAT in the UAE is 5%. You must register once your taxable supplies and imports pass AED 375,000 over the past 12 months, or you expect to pass it in the next 30 days. You may register voluntarily from AED 187,500. Returns are usually filed quarterly, by the 28th of the month after the period, and late registration is a AED 10,000 penalty.
The basics
VAT has applied in the UAE since 2018 at a standard rate of 5%. Most goods and services are standard-rated, but two other categories matter:
- Zero-rated (0%): you charge no VAT but can still recover the VAT on your costs. Examples include exports outside the GCC, international transport, the first supply of new residential property, and much of healthcare and education.
- Exempt: no VAT is charged and you generally cannot recover related input VAT. Examples include certain financial services, residential property after its first supply, bare land, and local passenger transport.
The practical difference is recovery: zero-rated still lets you reclaim input VAT, exempt does not.
When you must register
There are two thresholds, both measured on taxable supplies and imports (not exempt supplies):
- Mandatory registration once your taxable supplies and imports exceed AED 375,000 in the past 12 months, or you expect to exceed it in the next 30 days.
- Voluntary registration is available from AED 187,500 of supplies, imports or taxable expenses.
Standard-rated and zero-rated supplies and imports count toward the threshold. Exempt supplies do not.
Filing and paying
The FTA assigns you a filing period when you register, quarterly for most businesses and monthly for large ones. Returns are due by the 28th day of the month following the end of the tax period, and the VAT you owe must be paid through EmaraTax by the same date. For a January to March quarter, that means 28 April.
The penalties worth avoiding
- Late or missed registration: AED 10,000.
- Late filing: AED 1,000 for a first offence, AED 2,000 if repeated within 24 months, and this applies even to a nil return.
- Late payment: since the 14 April 2026 penalty reform, a flat 14% per year, accrued monthly on the unpaid tax.
Deregistration
You must deregister if you stop making taxable supplies, or if your taxable turnover over the last 12 months falls below AED 187,500 and is not expected to recover. You may deregister voluntarily if turnover is between AED 187,500 and AED 375,000 (after being registered at least 12 months). Apply within 20 business days of the triggering event, as late deregistration carries a penalty of AED 1,000 per month up to AED 10,000.
Keep your records
VAT records must be kept for 5 years from the end of the relevant tax period, and for 15 years for real estate. Keep valid tax invoices for everything, since they are what support your input VAT claims.
FAQ
Do zero-rated sales count toward the AED 375,000 threshold?
Yes. Zero-rated supplies and imports count. Exempt supplies do not.
How often do I file?
Most businesses file quarterly; larger businesses are assigned monthly periods by the FTA.
What happens if I register late?
A fixed AED 10,000 penalty, plus you may owe VAT you should have been charging.
Want VAT off your plate?
We watch your thresholds, register you at the right time, and file every VAT return on schedule, so you never trip a penalty or a deadline.
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