Key facts
- Standard rate
- 5% since 1 January 2018
- Mandatory registration
- taxable supplies and imports over AED 375,000 in 12 months
- Voluntary registration
- over AED 187,500
- Return and payment
- by the 28th day after the tax period ends
- Records
- keep for at least 5 years
Overview
General information, not tax advice. Rules change — check the current law and guidance on tax.gov.ae (FTA) and mof.gov.ae before you act.
Value Added Tax was introduced in the UAE on 1 January 2018 by Federal Decree-Law No. 8 of 2017 on Value Added Tax, with its Executive Regulation (Cabinet Decision No. 52 of 2017). It is administered by the Federal Tax Authority (FTA). The standard rate is 5%.
VAT is charged at each stage of the supply chain. A registered business charges VAT on its sales (output tax), recovers the VAT it paid on business purchases (input tax), and pays the difference to the FTA — or claims it back if input tax is higher.
Who must register
- Mandatory: when the value of taxable supplies and imports exceeded AED 375,000 over the previous 12 months, or is expected to exceed it in the next 30 days.
- Voluntary: when taxable supplies and imports, or taxable expenses, exceed AED 187,500.
- After registration the business receives a Tax Registration Number (TRN), which must appear on its tax invoices.
Registration, returns and payments are handled on EmaraTax, the FTA's online platform.
Standard-rated, zero-rated, exempt and out of scope
Most goods and services are taxed at 5%. Some supplies are zero-rated, some are exempt, and some fall outside the scope of VAT. The difference matters for input tax recovery.
| Treatment | VAT charged | Input tax on related costs | Typical examples |
|---|---|---|---|
| Standard-rated | 5% | Recoverable | Most goods and services sold in the UAE |
| Zero-rated | 0% | Recoverable | Qualifying exports of goods and services outside the GCC implementing states, international transport, certain education and healthcare services, first supply of new residential property |
| Exempt | None | Generally not recoverable | Certain financial services, later supplies of residential property, bare land, local passenger transport |
| Out of scope | None | Depends on the case | Transactions that are not supplies for VAT purposes, for example certain transactions within a VAT group |
Each category has detailed conditions in the law and the Executive Regulation. If a supply is borderline, check the FTA's public guides for that sector.
What a tax invoice must show
A registered supplier must issue a tax invoice for taxable supplies, generally within 14 days of the date of supply. A full tax invoice includes, among other things:
- the words “Tax Invoice” clearly displayed;
- the supplier's name, address and TRN, and the recipient's name, address and TRN where the recipient is registered;
- a sequential invoice number, the date of issue, and the date of supply if different;
- a description of the goods or services, quantity, unit price, tax rate and amount payable;
- any discount, the total amount payable, and the VAT amount stated in AED.
A simplified tax invoice with fewer details may be used in specific cases, for example when the recipient is not registered. The exact list of fields is set by the Executive Regulation; check the current FTA guidance, especially as e-invoicing is introduced.
Reverse charge on imported services
When a registered business in the UAE buys services from a supplier abroad, the foreign supplier usually does not charge UAE VAT. Instead the recipient applies the reverse charge: it accounts for the output VAT itself and, if the purchase is for taxable business activity, recovers the same amount as input tax in the same return.
The net effect is often zero, but both sides must be reported: the supply in Box 3 and the recoverable input in Box 10 of the VAT 201 return. Imports of goods are reported separately (Boxes 6 and 7).
Tax periods and deadlines
Most businesses file quarterly; the FTA may assign a monthly or other tax period. The tax period and its stagger (which months each quarter covers) are shown in the business's EmaraTax account.
The VAT return must be filed and any payable tax paid no later than the 28th day after the end of the tax period. For example, for a quarter ending on 31 December the deadline is 28 January.
The VAT 201 return, box by box
The VAT 201 return is submitted on EmaraTax. Each box shows an amount (net of VAT) and, where relevant, the VAT on it.
| Box | What goes in it |
|---|---|
| 1a–1g | Standard-rated supplies by emirate: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, Fujairah |
| 2 | Tax refunds provided to tourists under the Tax Refunds for Tourists Scheme |
| 3 | Supplies subject to the reverse charge provisions (output side) |
| 4 | Zero-rated supplies |
| 5 | Exempt supplies |
| 6 | Goods imported into the UAE |
| 7 | Adjustments to goods imported into the UAE |
| 8 | Totals of sales and other outputs |
| 9 | Standard-rated expenses (input VAT you recover) |
| 10 | Supplies subject to the reverse charge provisions (input side) |
| 11 | Totals of expenses and other inputs |
| 12 | Total value of due tax for the period |
| 13 | Total value of recoverable tax for the period |
| 14 | Payable tax for the period (12 minus 13) |
If Box 14 is negative, the business has excess recoverable tax, which it can carry forward or request as a refund under the FTA's rules.
Record keeping
Businesses must keep tax invoices, credit notes, import and export documents, accounting records and other VAT records for at least 5 years after the end of the tax period they relate to. Longer periods apply to some records, for example those relating to real estate. Records must be complete and available to the FTA on request.
How Ledgr helps
- Tax invoices in English and Arabic with your TRN and the customer's TRN, quotes and credit notes.
- Bills and expenses with VAT included or added, and the reverse charge for services from abroad.
- The VAT 201 return built line by line as on EmaraTax, with the documents behind every amount one click away.
- A compliance calendar that tracks the VAT return deadline for each quarter, with tasks and notifications.
Official sources
- Federal Tax Authority — VAT: laws, decisions and guidestax.gov.ae/en/taxes/vat.aspx
- Federal Tax Authority — Filing VAT returns and making paymentstax.gov.ae/en/taxes/vat/vat.topics/filing.vat.returns.and.making.payments.aspx
- Ministry of Finance — UAE tax legislationmof.gov.ae/en/public-finance/tax/
- UAE Government portal — Taxationu.ae/en/information-and-services/finance-and-investment/taxation
General information, not tax advice. Rules change — check the current FTA and Ministry of Finance guidance before you act.