VAT has applied in the UAE since 1 January 2018 at a standard rate of 5%. For growing companies, the key questions are when registration becomes necessary and how to stay compliant once registered.
Registration thresholds
- Mandatory registration: taxable supplies and imports exceeding AED 375,000 over the previous 12 months, or expected to exceed that amount within the next 30 days
- Voluntary registration: taxable supplies, imports or expenses exceeding AED 187,500
Monitoring turnover month by month helps you register on time. Late registration can result in penalties, so it is worth building threshold checks into your routine.
Once you are registered
- Issue tax invoices that meet UAE requirements
- File VAT returns for each tax period by the due date
- Keep records of supplies, purchases and imports
- Review the VAT treatment of new products, services or markets
Good bookkeeping is the foundation of accurate VAT returns. Businesses that reconcile regularly tend to file with less effort and more confidence.
