VAT Services
Expert Advisory & Compliance for UAE Value Added Tax
Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. VAT is a tax on the consumption or use of goods and services, levied at a rate of 5 per cent at the point of sale. It is governed by Federal Decree-Law No. 8 of 2017 on Value Added Tax.
VAT-registered businesses collect and account for the tax on behalf of the government. Tax Watch Law Firm provides comprehensive VAT advisory and compliance services to help businesses navigate their obligations effectively.
UAE VAT Rate
A uniform VAT rate applies across all emirates.
VAT is levied on taxable supply of goods or services at each step of the supply chain. Consumers bear the VAT in the form of a 5 per cent increase in the cost of taxable goods and services.
Purpose of VAT in UAE
VAT supports UAE's economic vision and regional coordination.
New Revenue Source
VAT provides the UAE with a new source of income which is utilized to provide high-quality public services.
Economic Diversification
Helps government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.
GCC Coordination
The UAE coordinates VAT implementation with other GCC countries through 'The Economic Agreement between the GCC States' and 'The GCC Customs Union'.
Criteria for Registering for VAT
Registration requirements depend on business type and annual turnover.
Mandatory Registration
If the taxable supplies and imports of a UAE-based business exceed AED 375,000 per annum.
Non-UAE Businesses
If a non UAE-based business makes taxable supplies in the UAE, regardless of its value, and there is no other person obligated to pay the due tax.
Voluntary Registration
VAT is optional for businesses whose supplies and imports exceed AED 187,500 per annum.
How to Register for VAT?
Businesses can register for VAT through the eServices section on the FTA website. They need to create an account first. Certain free zones have been specified as designated zones for VAT purposes, and special rules apply to supplies made in these zones.
Implications of VAT on Businesses
Businesses are responsible for carefully documenting their business income, costs, and associated VAT charges. VAT-registered businesses generally:
- Must charge VAT on taxable goods or services they supply
- May reclaim any VAT they have paid on business-related goods or services
- Keep a range of business records for government verification
- Report VAT charged and paid to the government on a regular basis
- File formal submissions and reports online through FTA
VAT Payment to Government
If a business has charged more VAT than it has paid, it must pay the difference to the government.
VAT Refund Claims
If a business has paid more VAT than it has charged, it can reclaim the difference. Foreign businesses may also recover VAT incurred when visiting the UAE.
Implications of VAT on Individuals
- VAT applies to the majority of transactions in goods and services
- Cost of living may increase slightly depending on lifestyle and spending
- Limited exemptions may be granted for certain supplies
- Businesses must clearly show VAT amount on each transaction
- Tourists also pay VAT at the point of sale
How Tax Watch Law Firm Assists with VAT
The Federal Tax Authority (FTA) is responsible for VAT administration, collection, and enforcement. Tax Watch Law Firm provides comprehensive support to help businesses navigate VAT requirements:
- VAT registration and de-registration advisory
- VAT return preparation and filing with FTA
- VAT records amendment and compliance support
- Zero-rated and exempt supplies guidance
- VAT treatment advisory for specific sectors
- Free zone and designated zone VAT compliance
- VAT refund claims for foreign businesses
- FTA audit support and representation
We ensure your business remains fully compliant with UAE VAT regulations while optimizing your tax position within the legal framework.
Ensure Full VAT Compliance
VAT compliance is essential for businesses operating in the UAE. Tax Watch Law Firm provides expert guidance to help you register, file returns, claim refunds, and maintain full compliance with FTA regulations.
On Watch for Your Compliance — and Your Defense.
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