Value Added Tax (VAT) was introduced in the UAE on January 1, 2018, at a standard rate of 5%. VAT is a consumption tax levied on most goods and services at each stage of the supply chain.
Businesses operating in the UAE must understand their VAT obligations, including registration requirements, filing procedures, and compliance with Federal Tax Authority (FTA) regulations.
Key Point: VAT registration is mandatory for businesses with taxable supplies and imports exceeding AED 375,000 annually. Voluntary registration is available for businesses exceeding AED 187,500.
To register for VAT in the UAE, businesses must meet specific thresholds and provide required documentation.
VAT-registered businesses must file periodic returns through the FTA portal, reporting output VAT (collected from customers) and input VAT (paid to suppliers).
Gather all sales invoices, purchase invoices, expense receipts, and import documents for the tax period.
Categorize each transaction as standard-rated, zero-rated, exempt, or out-of-scope.
Sum output VAT (collected) minus input VAT (paid) to determine net VAT payable or recoverable.
Log into the FTA portal and complete all boxes of the VAT return form accurately.
Submit the return online and pay any VAT due before the deadline.
VAT returns must be filed within 28 days of the end of the tax period. Late filing or late payment results in penalties imposed by the FTA.
Ratio handles complete VAT registration, filing, and FTA compliance for over 200 UAE SMEs. We ensure on-time submissions, maximize input VAT recovery, and maintain audit-ready records.