United Arab Emirates
There will be two VAT rates applicable within the UAE:
- The standard rate of VAT – 5%; and
- Zero rate of VAT – 0%.
If a company is resident in the UAE, they are required to register for VAT if:
- The total value of their taxable supplies and imports made within the UAE exceeds the Mandatory Registration Threshold of AED 375,000 over the previous 12-month period; or
- The person anticipates that the total value of their taxable supplies or imports will exceed AED 375,000 in the next 30 days.
If the business is not a resident in UAE they will be legally obligated to register for VAT if they make any taxable supplies or imports in the UAE, unless there is another person in the UAE who is responsible for accounting for VAT on such activities. There is no threshold for such supplies.
The main categories of supplies and imports that need to be taken into account for the purposes of VAT registration thresholds are:
- Supplies of goods or services made in the UAE in the course of business.
- Any goods or services that the person has imported into the UAE that would have been subject to VAT had they been supplied in the UAE.
Where the value of relevant supplies or taxable expenses of a person exceeds AED 187,500 a company may apply for VAT registration voluntarily
Filing period: Monthly / Quarterly, depending on revenue
The due date for submitting tax returns and making a payment of payable tax to the FTA is the 28th day following the end of the tax period to which the tax return relates.
Key Issues to Consider:
- Import VAT relief
- Designated free zones
- Intra-GCC supplies
- VAT recovery for non-registered businesses