Value-Added Tax (VAT) in the UAE is now a well-established part of the business environment. If your business’s taxable supplies and imports exceed AED 375,000 annually, you must register for VAT. If you exceed AED 187,500, you may register voluntarily.
Here’s what you should know:
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5% VAT rate: Most goods and services are taxed at the standard rate of 5%. Some supplies are zero-rated or exempt.
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Registration thresholds: Mandatory registration begins at AED 375,000 of taxable supplies & imports; voluntary registration is possible at AED 187,500.
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Filing and deadlines: After registration, VAT returns must be submitted to the Federal Tax Authority within 28 days after the end of each tax period.
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Record-keeping and documentation: Maintain accurate invoices, receipts, purchase records, expense reports, and any credit or debit notes. Errors can lead to penalties.
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Why external expertise helps: VAT law in the UAE has nuances (input vs output VAT, exemptions, reverse charge, etc.). Working with accountants/bookkeepers ensures compliance, accuracy, and frees you to focus on core business.
By understanding VAT requirements and staying compliant, you protect yourself from fines, build trust with clients and partners, and maintain smooth operations in Dubai.