Value Added Tax (VAT) in UAE
Value Added Tax (VAT) is an indirect consumption tax levied on the supply of goods and services at each stage of the supply chain. VAT is governed by Federal Decree-Law No. 8 of 2017 on Value Added Tax and its subsequent amendments, along with the Executive Regulations issued by the UAE Cabinet.
VAT was introduced in the UAE on 1 January 2018 at a standard rate of 5%, making it one of the lowest VAT rates in the world. It is administered by the Federal Tax Authority (FTA).
Introduction about Value Added Tax
What is Value
Added Tax (VAT)?
Scope of Value Added Tax (VAT) in UAE
Add Your Heading Text Here
- All businesses and individuals conducting business activities under a commercial licence in the UAE
- Free zone businesses (The UAE CT regime will continue to honour the CT incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business set up in the UAE’s mainland.)
- Foreign entities and individuals only if they conduct a trade or business in the UAE in an ongoing or regular manner
- Banking operations
- Businesses engaged in real estate management, construction, development, agency and brokerage activities.
Add Your Heading Text Here
- All businesses and individuals conducting business activities under a commercial licence in the UAE
- Free zone businesses (The UAE CT regime will continue to honour the CT incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business set up in the UAE’s mainland.)
- Foreign entities and individuals only if they conduct a trade or business in the UAE in an ongoing or regular manner
- Banking operations
- Businesses engaged in real estate management, construction, development, agency and brokerage activities.
Add Your Heading Text Here
- All businesses and individuals conducting business activities under a commercial licence in the UAE
- Free zone businesses (The UAE CT regime will continue to honour the CT incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business set up in the UAE’s mainland.)
- Foreign entities and individuals only if they conduct a trade or business in the UAE in an ongoing or regular manner
- Banking operations
- Businesses engaged in real estate management, construction, development, agency and brokerage activities.
Add Your Heading Text Here
Register within 90 days from the license issue date.
All taxable persons in the UAE must apply to register for Corporate Tax with the Federal Tax Authority (FTA). Newly incorporated entities must register within 90 days of obtaining their trade license. Existing entities follow a tiered FTA registration timetable based on the month of license issuance.
Late Registration Penalty
- AED 10,000
Toll Free Number
800 TAX24
Toll Free Number
800 TAX24
Toll Free Number
800 TAX24
All UAE Juridical Persons
LLCs, PSCs, PJSCs, free zone entities, branches and other legal persons incorporated in the UAE — registration is mandatory regardless of turnover.
Natural Persons (Individuals)
Required to register if their annual business or business-related turnover exceeds AED 1 million in a Gregorian calendar year.
Non-Resident Persons
Must register if they have a Permanent Establishment (PE) in the UAE, derive State-Sourced Income, or have a nexus in the UAE.
Free Zone Persons
Must register and file CT returns even if claiming the 0% Qualifying Free Zone Person (QFZP) regime — registration is not optional.
90-Day Deadline (New Entities)
Application must be submitted to the FTA within 90 days from the date of trade license issuance for newly incorporated businesses.
Late Registration Penalty — AED 10,000
A fixed administrative penalty of AED 10,000 is imposed for failure to register within the specified timeframe.
Required Documents
Trade License, Emirates ID & Passport copies of all shareholders, MOA / valid POA, Manager contact details, and financial information for the first tax period.
Micro
Filing Lite
Features:
- Quarterly VAT Filing (4 returns)
- Annual Corporate Tax Return Filing