Mandatory provisions and exemptions concerning UAE VAT

Despite the fact that for many types of companies, there is practically no such thing as taxes in the UAE, let's look at the taxes that are worth paying attention to. In the article below, we will provide details about mandatory provisions and exemptions under Vat in UAE. We will also tell you how to file a tax return in the UAE.


Registration for VAT

A company must register for Vat return if its taxable income exceeds the mand


atory registration limit of AED 375,000.

Moreover, a company can optionally decide to register for VAT if its income does not exceed the mandatory registration limit but exceeds the voluntary registration level of AED 187,000.


You can check the website of the UAE government to know vat return filing date in uae.


Mandatory provisions for companies regarding VAT:


You need to collect VAT on the offered goods or services subject to taxation;

You can change the amount of any VAT levied related to goods and services intended for the conduct of business;

It is necessary to keep records, which will allow the authorities to evaluate and receive the collected VAT.


If you are a VAT payer, you must quarterly submit reports, information on the amount of VAT withheld and paid by you to the state budget. But for large groups, vat return filing must be submitted monthly. This is a formal procedure; the report can be easily submitted online through the portal of the Federal Tax Authority


If the amount of VAT withheld by you exceeds the amount of VAT paid, then you must reflect this in the statements and pay the difference to the state budget. If the amount of VAT paid by you exceeds the withheld amount, you can claim a refund of the overpayment from the state budget.


You can take the help of vat consultants in dubai to get trn number in uae.


Companies exempt from VAT:


VAT as a tax on all types of consumption is applied at a rate of 5% on all transactions in goods and services unless otherwise specified in Article 46 of Federal Legislative Decree 2017 No. 8 On Value Added Tax, or the amount of zero percent in accordance with Article 5 of the Federal Legislative Decree, namely:


  • Certain vehicles such as trains, trams, ships, planes;
  • First sale/lease of residential buildings;
  • Aircraft or ships designed to rescue or provide assistance in the air or on the water;
  • Certain medical services and related goods and services, such as non-cosmetic surgeries;


How and when to pay VAT in the UAE?

Most companies pay VAT on a quarterly basis to the FTA, but the FTA may, at its discretion, set a different tax period than the standard one for a specific group of taxpayers. The vat filing dubai must be filed no later than the 28th day following the relevant tax period or before another date set by the Federal Tax Service.


At the end of each VAT period, the company must complete a VAT return form using the FTA online portal with appropriate payment in any of the following ways:


  • E-Dirham credit card.
  • Local bank transfer using GIBAN (a unique IBAN assigned to each taxpayer).
  • Direct cash deposit through exchange offices.