VAT for Businesses

With the introduction of VAT in the UAE, there are considerations that businesses would have to keep in mind. Here’s clarifying doubts that you as a company might have.

How will VAT be collected?

Businesses are required to document their earnings and expenditures germane to VAT.

Registered businesses shall:

  • Charge a VAT of 5% to their customers
  • Incur a VAT on goods and services that they receive from their suppliers The differential between these two amounts shall be paid to or reclaimed from the government, as applicable.

Which businesses should register for VAT?

For businesses whose value of taxable goods and supplies exceed AED 375,000, it is mandatory to register for VAT. For businesses whose value of taxable goods and supplies is less than this threshold but over 187,500, registering for VAT is optional.

When are registered businesses required to file VAT returns?

Registered businesses must file VAT returns with the FTA on a regular basis, within 28 days of the end of the tax period, as mentioned in their VAT registration certificate or the official tax website dashboard.

VAT returns can be filed using online services.

How to file VAT returns?

VAT return filing in the UAE will be online – manual returns are not acceptable. The e-filing of VAT can be undertaken on the web portal of FTA. The e-services section offers the option for VAT return filing. VAT returns should be filed every quarterly or monthly; delay in filing returns is liable to attract penalties by the tax authorities.

What kind of records are businesses required to maintain, and for how long?

It is mandatory for taxable businesses to maintain books of accounts under UAE VAT law. In addition to that, the authority can ask for additional documents such as annual accounts, general ledger, purchase day book, invoices issued, invoices received credit notes, debit notes, VAT Ledger, etc.

Under the UAE VAT law, the books of accounts and records are to be maintained for 5 years.

Can businesses offset customs duty against VAT payments?

A VAT is payable over and above the customs duty paid by an importer. VAT shall be computed on the price of the good/service including customs duty.

What if a business doesn’t follow VAT?

Penalties shall be imposed in case of non-compliance. Non-compliance could mean:

  • Failing to register for VAT if you fall in the taxable category
  • Failing to submit VAT return or pay the VAT within the allotted period
  • Failing to maintain the records required as per the tax legislation
  • Evading VAT

A VAT would come into effect in the UAE from 1 January 2018. Companies with an annual turnover of over AED 150 million are urged by the authority to register for VAT before October 31, 2017, and those with an annual turnover of over AED 10 million are advised to register before November 30, 2017.

We at UAE21 have our team of experts to help you with company formation, registration, and counseling. For any queries on VAT or tax consultation for companies in the UAE, feel free to reach out to us.

VAT Registration

Business Consulting

Second Citizenship

PRO Services

UAE Residence Visa

Attestation of Certificates

Get a Free Expert Advice

Fill out the form below and our experts will contact you to provide a free consultation.

Send us mail

Business Setup in Dubai

As it’s known around the world, Dubai is a tax haven that embraces new investors to setup business and welcomes them to exploit the unending potential of the UAE markets. The stable politics and its rapidly flourishing economy has contributed to a stream of new business setup in Dubai, partnerships and booming prospects.

Come join this groundbreaking steam of business opportunities with the most reputed talent in the country, UAE 21. We are the all-in-one business setup consultants in Dubai and can make the process of company formation in Dubai for you as easy as one-two-three. A company formation in Dubai involves a number of stages. Whether it’s getting

Trade Licenses


Finding a Local Sponsor

We’ve got it all covered

Reputed Business Consultancy

Without the right helping hands, the stages of business setup in Dubai can wind up to be exhausting, pricey and strenuous. The reason we have become the most reputed business consultancy in Dubai is our ability to form a reliable relationship with you before the company formation process. That’s also why we are able to understand your unique requirements and serve you excellently.

Professional services

Since we work closely with the government as part of our PRO services in Dubai and throughout company formations, rest assured you can get your visas processed and all the required approvals on time.

Join hands with UAE 21 today and set up your business, risk-free at affordable costs!

We Have The Experts

Get your Document Typed In Rightway

Professional Typing Services

  • Schengen, UK, USA, Thailand VISA Application Typing
  • DED Application Typing
  • Memorandum of Agreement Typing
  • Power of Attorney Typing
  • Emirates ID Typing
  • MOHRE Application Typing
  • Immigration Application Typing
  • E-forms Application Typing
  • Medical Application Form Typing

Company Formed


Years Of Experiences


Availability & Support


Our Happy Clients

Translate Language»