• The UAE implemented VAT on January 1, 2018.
  • VAT is a consumption tax levied on the supply of goods and services and the import of goods.
  • The standard VAT rate in the UAE is 5%.
  • Some supplies and sectors may qualify for zero-rated VAT, meaning goods and services are taxable at 0% with the ability to reclaim input VAT.
  • Certain supplies may be exempt from VAT, where no VAT is charged, but businesses cannot reclaim input VAT related to exempt supplies.
  • VAT returns are typically filed on a quarterly basis by registered businesses.
  • Registered businesses are required to maintain proper VAT records and issue VAT invoices for taxable supplies.
  • Businesses with an annual turnover exceeding a specific threshold (currently AED 375,000) must register for VAT.
  • There are specific rules and guidelines for VAT registration, deregistration, and VAT compliance in the UAE.
  • The UAE’s Federal Tax Authority (FTA) is the regulatory body responsible for implementing and overseeing VAT in the country.