Tax, banking and compliance
VAT registration and returns in the UAE
VAT is a 5% tax on most goods and services supplied in the UAE, in force since 1 January 2018. A business must register with the Federal Tax Authority when its taxable supplies and imports pass AED 375,000 in 12 months, and may register voluntarily above AED 187,500. Registered businesses charge VAT, file returns and keep records.
At a glance Fact sheet
- Standard rate
- 5%
- Mandatory registration
- Taxable supplies and imports above AED 375,000 in the previous 12 months, or expected in the next 30 days
- Voluntary registration
- Taxable supplies and imports, or taxable expenses, above AED 187,500
- Returns
- Filed on EmaraTax, with payment, within 28 days of the end of each tax period
- Administered by
- Federal Tax Authority
- Free zone companies
- Register on the same thresholds when they make taxable supplies
Overview
VAT is collected by businesses on behalf of the government. A registered business adds 5% to its taxable sales, recovers the VAT it paid on business purchases, and pays the difference to the Federal Tax Authority. If the VAT on purchases is higher than the VAT on sales, the excess can be reclaimed or set against future amounts due.
Registration is not linked to the licence. It depends on turnover, measured as the value of taxable supplies and imports over the previous 12 months, and on what you expect in the next 30 days. A new company may therefore have no VAT obligation at first and then cross the threshold after a single large contract. Businesses based outside the UAE that make taxable supplies here can be required to register whatever the value.
Caliph checks your position when the licence is issued and again as you grow. We prepare the registration on EmaraTax and show your team what a valid tax invoice needs. Your accountant keeps the VAT records and prepares each return, and we keep the filing dates on your calendar.
How Caliph helps with VAT
A threshold check before it is urgent
We compare your contracts and forecasts with the mandatory and voluntary thresholds and tell you when to apply.
Voluntary registration weighed up
Registering early lets a start-up recover the VAT on its setup costs, but it also brings returns to file. We set out both sides before you decide.
An application that matches the licence
Activity descriptions, turnover figures and bank details are entered to agree with your licence and supporting documents, which reduces queries.
Invoices set up correctly
Once you hold a tax registration number your invoices must show it. We go through the required contents with whoever issues them.
Deregistration when it is due
If you stop making taxable supplies or fall below the threshold, we prepare the deregistration so the registration does not stay open.
What to have ready for VAT registration
- Trade licence
- Passport copy and Emirates ID of the owner or authorised signatory
- Memorandum of Association or other proof of the signatory's authority
- Turnover figures for the last 12 months, with supporting invoices or contracts
- Expected turnover for the next 30 days, where you are registering ahead of the threshold
- Company bank account details, if the account is already open
- Details of imports and exports and your customs registration, if you trade in goods
- Company address and contact details
The Federal Tax Authority may ask for extra evidence of turnover. Your consultant tells you what suits your case.
How VAT registration and returns work
We measure your turnover
Your consultant totals taxable supplies and imports for the past 12 months and looks at confirmed orders for the next 30 days.
You decide when to register
If registration is mandatory we apply straight away. If it is voluntary we explain what changes for your pricing and paperwork.
The application goes in on EmaraTax
We complete the VAT registration form, attach the evidence and respond to questions from the Federal Tax Authority.
You receive the registration number
The certificate shows your tax registration number, the effective date and your first tax period.
You charge VAT and issue tax invoices
From the effective date you add VAT to taxable sales and keep purchase invoices to support the VAT you recover.
Returns are filed each tax period
Your accountant files the return on EmaraTax and any payment is made within 28 days of the period end.
Good to know
- Treat this page as general guidance. Your tax adviser confirms how VAT applies to your business.
- Not every supply carries 5%. Exports outside the GCC and international transport are examples of zero-rated supplies, and most residential leases are exempt. The category affects whether you can recover the VAT on your costs.
- The Federal Tax Authority assigns your tax period. Most smaller businesses file quarterly.
- The treatment of free zones and of specific sectors differs in detail. Ask your Caliph consultant which rules cover your business.
Questions people ask
When is VAT registration mandatory in the UAE?
You must register when your taxable supplies and imports exceeded AED 375,000 over the previous 12 months, or when you expect them to exceed that amount in the next 30 days. The threshold does not apply to foreign businesses, which can be required to register regardless of value.
Can I register for VAT voluntarily?
Yes, if your taxable supplies and imports, or your taxable expenses, exceeded AED 187,500 in the previous 12 months or are expected to in the next 30 days. Voluntary registration suits new businesses with significant setup costs, because it lets them recover the VAT paid on those costs.
Do free zone companies need to register for VAT?
A free zone licence does not take a company out of VAT. If it makes taxable supplies above the threshold, it registers like any other business. Some free zones are classed as designated zones with their own treatment, and the detail depends on the zone and the transaction, so check it with your tax adviser.
How often do I file a VAT return?
The Federal Tax Authority assigns each registered business a tax period, quarterly for most smaller businesses and monthly for the largest. The return and any payment are due within 28 days of the end of each period, and filing is done online through EmaraTax.
What records do I need to keep for VAT?
Keep the tax invoices you issue, the purchase invoices that support the VAT you recover, import and export documents and your accounting records. The Federal Tax Authority must be able to check your returns against them. The law sets how long records are kept, and your accountant confirms the period for your type of business.
What is the difference between zero-rated and exempt supplies?
In both cases the customer pays no VAT, but the effect on your costs is different. A business making zero-rated supplies, such as exports outside the GCC, can still recover the VAT on its purchases. A business making exempt supplies, such as most residential leases, cannot recover the VAT on the related costs.
Reviewed by Caliph Business Solutions on . Rules differ by activity and by authority. Your Caliph consultant confirms what applies to you.
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