Value Added Tax (VAT) was introduced in the UAE on 1 January 2018 with a rate of VAT 5%. The VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. UAE imposes VAT on tax registered businesses on a taxable supply of goods or services at each step of the supply chain. VAT registered businesses collect the amount on behalf of the government; consumers bear the VAT in the form of a 5% increase in the cost of taxable goods and services they purchase in the UAE.

Am I eligible for VAT?

All companies operating in the UAE offering products or services falling in taxable categories with annual income exceeding AED 375,000 must register for VAT. Such registration is optional and voluntary for companies with the value of annual supplies and imports below AED 375,000 but above AED 187,500.

VAT-registered businesses must:

  • Charge the appropriate amount of VAT on their taxable goods/services
  • Maintain business records to enable the government or auditor to check if things are in order
  • Report the VAT charged, and the VAT paid to the government, on a regular basis

What are my VAT-related responsibilities?

All UAE companies have to record all their financial transactions and ensure that their ledgers are transparent and up-to-date. VAT-eligible businesses must register for it.

How can VAT process help your business to grow?

Revenue Generation

VAT immensely contributes towards providing you a new avenue from which your business can generate revenue. This paves out a way for extensive planning and leverage the business growth to the next level.

Complete Financial Picture

VAT is a mandate for companies as per the UAE VAT Law. Registering a business for VAT with expert consultants ultimately completes the financial picture that is required during an internal and an external audit.

Enhances Goodwill

Registering for VAT will lead to your business getting noticed by the government of the country. This maximizes the chance of earning a good reputation, and enhancing your company to enhance its goodwill.

New Investment Opportunities

Being a VAT registered business, you will be noticed more by the prospective clients, which would ultimately bring more business. On the other hand, it also opens new investment doors for your business to secure its future

What is the deadline for registering for VAT?

Businesses 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. In any case, all businesses eligible for VAT should be registered by January 1, 2018, and should submit their registration applications prior to December 4, 2017 – to avoid the risk of not being registered in time.

How to register for VAT?

Companies can register on the FTA’s internet portal. Companies must set up an online account on the site and fill out the VAT registration form.