VAT, or Value Added Tax, is a consumption tax imposed on the supply of goods and services in the UAE. It was introduced on January 1, 2018, at a standard rate of 5%.
Businesses must register for VAT if their taxable supplies exceed AED 375,000 over the past 12 months. Voluntary registration is available for those whose supplies exceed AED 187,500.
Certain sectors, such as healthcare, education, and specific basic consumer goods, are exempt from VAT.
VAT returns must be submitted electronically through the Federal Tax Authority (FTA) portal. The submission is typically required on a quarterly or annual basis, depending on the business's VAT registration category.
The reverse charge mechanism shifts the VAT liability from the supplier to the recipient in certain cases, particularly for imports. In such instances, the recipient must register and account for the VAT.
Yes, businesses can claim VAT refunds for eligible expenses and input tax. The process involves submitting a refund application to the FTA.
Yes, the mandatory registration threshold is AED 375,000 in taxable supplies over the past 12 months.
Exempt supplies are not subject to VAT at all, while zero-rated supplies are taxable but charged at 0%, allowing businesses to reclaim input VAT.
Yes, industries such as real estate, financial services, and healthcare may have unique VAT treatment and exemptions.
