What is the VAT registration threshold in UAE?

The mandatory VAT registration threshold is AED 375,000. Voluntary registration is available at AED 187,500.

What documents are required for VAT record keeping?

VAT invoices, debit & credit notes, import/export records, and documents for zero-rated and exempt supplies are required.

How often should VAT returns be filed in UAE?

VAT returns must be filed quarterly, with the deadline on the 28th of the following month.

What’s the difference between zero-rated and exempt supplies?

Zero-rated supplies are taxable at 0%, allowing businesses to reclaim input VAT. Exempt supplies don’t charge VAT, and input VAT cannot be claimed.

Why should businesses hire VAT consultants?

VAT consultants provide expert advice, ensure timely compliance, train staff, and protect businesses from fines.

VAT Compliance UAE MAK Auditing

How to Make Sure Your Business is 100% Compliant with UAE VAT Law

VAT compliance UAE is one of the most important responsibilities for every business registered in the United Arab Emirates. If a company isn’t compliant with VAT laws, it risks heavy penalties, interest charges, and reputational loss. Value Added Tax (VAT) is an indirect tax applied at a standard rate of 5% on goods and services. It was introduced in UAE on 1st January 2018 to diversify income sources and reduce dependency on oil revenues.

Every business that crosses the mandatory VAT registration threshold of AED 375,000 must register with the Federal Tax Authority (FTA). Businesses crossing AED 187,500 can register voluntarily. VAT compliance means more than just filing returns. It requires accurate record keeping, timely submissions, correct categorisation of supplies, and adopting the right financial systems.

Mubarak Al Ketbi (MAK) Auditing helps companies in Dubai and UAE ensure complete VAT compliance, protecting them from penalties and building trust with regulators.

Register Your Business with the Federal Tax Authority

The first step in VAT compliance is registration with FTA. A business must:

Register if taxable turnover exceeds AED 375,000.
Consider voluntary registration at AED 187,500.
Obtain a Tax Registration Number (TRN).
Charge VAT on taxable goods and services.
File VAT returns according to the law.

Failure to register on time leads to heavy fines.

Record Maintenance for Business Transactions

Record keeping is mandatory under VAT law. All transactions with monetary value must be properly recorded in books of accounts. This helps businesses track their input and output VAT.

Documents required:

VAT Invoices – evidence of VAT charged.
Debit & Credit Notes – adjustments for returns, damaged goods, or cancellations.
Import & Export Records – customs documents for international trade.
Zero-rated & Exempt Supplies – proper classification for compliance.

Maintaining accurate records ensures transparency and avoids disputes during FTA audits.

Categorisation of Supplies – Zero Rated & Exempted

VAT in UAE applies differently depending on the supply:

Zero-Rated Supplies (0% VAT):
- Export of goods and international services.
- Precious metals.
- Certain healthcare and education services.
- Residential properties supplied within three years.
Exempted Supplies (No VAT charged):
- Local passenger transport.
- Bare land sales.
- Residential leases.
- Certain financial services.

Correct categorisation prevents overpayment and avoids penalties from wrong VAT treatment.

Submit VAT Return Statements on Time

VAT registered businesses must file quarterly returns with the FTA. Deadlines are usually the 28th day of the month following the tax period.

A VAT return includes:

Output tax collected from customers.
Input tax eligible for recovery.
Net VAT payable or refundable.

Late submissions result in fines of AED 1,000 for the first time and AED 2,000 for repetition within 24 months. Businesses must adopt a reliable system to ensure compliance.

Hire a Tax Consultant for VAT Planning

Tax laws in UAE are complex, and mistakes can lead to penalties. Hiring a tax consultant provides:

Expert advice on VAT compliance.
Training for the accounts team.
Proper implementation of accounting systems.
Timely submission of returns.
Protection against fines and penalties.

A professional consultant like Mubarak Al Ketbi (MAK) Auditing ensures your business remains 100% compliant with VAT rules.

Benefits of VAT Compliance for Businesses

Legal protection from fines and penalties.
Better financial discipline within the organization.
Transparency in operations.
Increased investor and customer trust.
Eligibility for VAT refunds on business expenses.

🥇 What Can Help – Mubarak Al Ketbi (MAK) Auditing

At Mubarak Al Ketbi (MAK) Auditing, we specialize in VAT compliance services in Dubai and UAE. From VAT registration to filing returns, our team ensures your business meets all legal requirements.

As the saying goes, “An ounce of prevention is worth a pound of cure.” Choosing expert VAT consultants helps you stay ahead and avoid penalties.

For more information visit our office:

📍 Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
📞 Contact/WhatsApp: +971 50 276 2132

FAQs VAT Compliance UAE MAK Auditing

What is a tax loss in UAE corporate tax?

tax loss is when your business deductions are more than your taxable income, making your taxable income negative.

How much of my tax loss can I use each year?

You can use up to 75% of your taxable income in a year to set off tax losses. The rest is carried forward.

Can I transfer tax losses to another company?

Yes, you can transfer losses to another UAE company if you meet the 75% ownership rule and both companies have the same financial year.

What happens if the ownership of my company changes?

You can only use tax losses if the same person owns at least 50% from the loss year to the year you use it, and the company keeps doing similar business.

Can I use tax losses from before corporate tax started?

No, you can’t use losses from before corporate tax was introduced in June 2023.