Tax Consultants & Bookkeepers in the UAE


Expert VAT Opinions


How to update VAT registration information that has expired?

VAT has now been in place for almost a year and therefore most registered companies will have renewed their trade license since they first registered for VAT.

The FTA requires information uploaded at the time of registration to be updated each year as it expires. This includes the trade licence and the passports and Emirates IDs of the company owners. Read more...

Can a company adjust the current VAT payable against an earlier refundable amount under review from the FTA? 

Until the FTA approves the refund, you should make a full payment for your second quarter VAT return. By not making the full payment you are likely to incur interest penalties for an underpaid return until the date that the refund is approved. The refund will be made separately and should not be combined with the current VAT payment.

Can I take on new orders without a TRN Number? 

Once you have submitted your voluntary tax application on the FTA’s online portal you have to wait until they have reviewed the uploaded information and the registration is accepted before you can submit invoices with VAT included. Until that point, raise invoices that do not mention the words VAT or TAX and do not add VAT to the amount invoiced. Read more...

How a company can claim a refund on excess VAT

When a company files its tax returns, it is required to list the details of sales, purchases output VAT, and input VAT paid over the past three months.

The output VAT is the amount of tax collected on the company’s sales, and the input VAT is the amount paid to the supplier towards purchases and expenses. Read more...

Can I reclaim VAT charged by my bank on its fees?

The general rule is that you can reclaim VAT charged by your bank on transfer fees and monthly account maintenance fees. Most banks are already mentioning that VAT is included in the description of the fees charged, and some banks are showing their fees on one statement line and the VAT on a separate line. Read more...

Does a company branch have to be registered separately for taxes?

From a legal perspective, a branch is seen as an extension of the main company. Therefore, branches do not need to be registered separately for VAT as they will automatically fall under the main registration you completed in December 2017 ahead of the introduction of the tax in January. Do not consider the branch revenues and costs as separate from the main business; from a VAT perspective these should all be combined. Read more...

Should we issue a Credit Note for overpaid Invoices and if so, what is the correct VAT treatment for this credit note?

When you receive the overpayment, you should record the cash and a liability in their debtor account, but you should not have recorded any VAT as part of this overpayment. When you return the funds you just reverse the previous entry, again without any VAT. Read more...

Is claiming Input VAT on Invoices without Company Name or TRN allowed?

The expenditure must, of course, be business-related and not specifically excluded in the FTA guidance (like entertaining clients, for example). But as long as the amount spent on an individual transaction is less than Dh10,000, then you may reclaim the VAT even though the invoice does not show your company details or TRN. Read more...

I paid on time, but forgot to file my return. Can I avoid late fees?

The mistake means a Dh1,000 fee plus interest is owed to the Federal Tax Authority.

The quarterly VAT return process has two parts. First, you must complete and submit the VAT return online in the Federal Tax Authority’s Portal and secondly make the required VAT payment, which can be done through various channels, including e-dirham, visa or debit cards, bank transfer or through UAE Exchange. Read more...

Can I wait until I get paid by my customer before including this revenue on my tax return? 

Once you have issued the invoice you have to include the VAT on the next VAT return regardless of whether you have been paid by your customer.

The Decree law specifies the timeline for issuing Tax invoices and refers to the Date of Supply. The general rule for Date of Supply for services is when the provision of the service is complete... Read more...

How do I invoice a client in another currency?

The VAT legislation does allow for registered companies to raise sales invoices in a currency other than the dirham. Article 69 of the legislation states that if the supply is in another currency, then the amount stated in the tax invoice should be converted into the dirham according to the exchange rate approved by the Central Bank at the date of supply. This is not necessarily the date of invoice or the date the payment was received. Read more...

What entertainment expenses can my company reclaim VAT on?

The legislation in this area is very general, so it was welcomed when the Federal Tax Authority recently issued detailed guidance on the subject.

Where goods or services are purchased for employees to use - at no cost for them and for their personal benefit - including the provision of entertainment, then the VAT incurred on the cost is not recoverable. There are three circumstances in which a taxable entity is entitled to recover the tax on such costs. Read more...

When exactly should I register for VAT and what records do I need to keep?

Do not wait until your turnover has reached Dh375,000 before registering for VAT. The law says you need to look back over the previous 11 months and forward for the next month, obviously using anticipated turnover for the future month. If this total exceeds the registration threshold you should register. Read more...

As a start-up not paying VAT, how can I retain my big clients?

There seems to be a misconception within large company finance teams that they cannot do business with any supplier that isn’t VAT registered. The Federal Tax Authority (FTA) has said that a business should not deal with another business who they believe should be VAT registered and is not. Read more...

Is there a penalty for submitting VAT Return after the Due Date?

The legislation covering penalties and fines for violation of tax laws is included in Cabinet resolution 40. 

Failing to submit the VAT return on time will result in an immediate Dh1,000 penalty. If you do it again within a 24 month period this penalty rises to Dh2,000 Dirhams. On top of the late filing fee you will be charged a fee for the late payment based on a percentage of the amount of the tax due. Read more...

From when do i start using the UAE Central Bank Exchange Rates?

FTA has clarified that the businesses and individuals are not required to rework their tax invoices if they were issued prior to May 17, 2018 where they used a reliable source for exchange rates instead of the UAE Central Bank exchange rate. And also the same source has been used consistently from January 1 to May 16. But the invoices issued after May 17 has to use the UAE Central Bank exchange rates.

Do I have to pay VAT if I cut my tenancy contract short? 

VAT is a tax on supplies of goods and services. Therefore, no VAT is due if no supply takes place. As part of business arrangements, businesses will often make payments to compensate each other for any loss, omissions or other wrongdoings. A question arises whether VAT is due on such payments. Read more...


When to Use the Profit Margin Scheme to Account for VAT?


What does 'Submit Voluntary Disclosure' mean on my tax return?

The law says that if a taxable person becomes aware that a return submitted to the Federal Tax Authority is incorrect, resulting in a calculation of the payable tax being less than required by more than Dh10,000, they can make a voluntary disclosure to the authority within 20 business days once they become aware of the error. Read more...

Do I have to pay VAT twice on an item posted to the UAE?

Article 50 of the Executive Regulations of the Decree Law states that where goods are imported into the UAE by a consumer (defined as someone not registered for VAT) then UAE VAT must be paid to the authority before the goods are released. Read more...

What if the difference in VAT tax amount is less than AED 10,000?     

If a taxable person makes an error or omission or a wrong treatment of tax by which the output tax payable or input tax recoverable is less than AED 10,000 for a particular tax period, then they DONOT need to use the VAT Voluntary Disclosure Form 211. The Taxpayer can rectify such errors or omissions in the subsequent VAT Return without a separate disclosure.

Can a UK business visitor reclaim VAT on UAE spending?

The UAE has implemented a scheme whereby business visitors are able to recover VAT incurred on business expenses. The rules of the scheme are set out in Article 67 of the Executive Regulations and the FTA has also issued a separate user guide. Read more...

What is the best way to make a VAT payment to the Federal Tax Authority?

Making payment should be the easy part of completing the VAT filing process but many people have experienced issues. Many of the well-known banks still do not recognise the GIBAN, which is the unique IBAN number allocated to every VAT registrant. Read more...

How to report an error in a previously filed VAT return?

The rules covering reporting tax return errors to the FTA are covered in Article 8 of Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures. Read more...

Why am I charged tax to pick up a parcel from the post office?

Article 49 of the Decree Law states that a person not registered for tax shall pay due tax on import of concerned goods from outside the implementing states on the date of import. This means all goods coming into the UAE will also have VAT charged on them if the retailer has not already charged the tax at the point of payment. Read more...

Can a restaurant charge VAT after a two-for-one voucher has been used?

Article 40 of the VAT law and Article 28 of the Executive Regulations cover discounts and vouchers. It says in the case of a discount, the value of supply, which is the amount on which you pay VAT, may be reduced if the customer has benefited from the reduction in price and the supplier funded the discount. Read more...

Do I have to use the FTA's approved software provider to make my tax return?

The Decree Law and Executive Regulations do not prescribe that a business must use accredited accounting software to record their financial transactions. Read more...

Should our dormant real estate business be registered with the FTA?

A business is required to register with the FTA when either the total value of all taxable supplies over the previous 12-month period exceeds the mandatory registration threshold of Dh375,000, or it is anticipated that within the next 30 days the total value of all taxable supplies will exceed the threshold. Read more...

Who is liable for VAT on a property paid for last year?

There is still much confusion between parties on the subject of VAT as the whole process is still relatively new to all concerned. Read more...

A GIBAN number appears on my FTA page. What is that?

The GIBAN is a unique IBAN number that enables you to make your VAT payments through most UAE banks. When you add the FTA as a beneficiary, you can use your GIBAN as the Payees account number. You can also use the GIBAN if you want to make payment at your bank. Read more...

Key points about UAE VAT Registration

The Federal Tax Authority (FTA) has stressed that all businesses subject to the implementation of value added tax (VAT) should be fully aware of key on registering for VAT. Read more...

Can unpaid Sales Invoices be excluded from the VAT return?

The Decree law specifies the timeline for issuing Tax invoices and refers to the Date of Supply. The general rule for Date of Supply for services is when the provision of the service is complete, which for your business would be when the candidate starts their new job. You must issue a tax invoice within 14 days of the date of supply. Read more...

Can customers legally work with businesses that are not eligible to register for VAT?

As long as you are properly licensed there is no reason why your customers should refuse to work with you just because you are not VAT registered. There is a commonly held misconception that all businesses must be registered for VAT, regardless of the size of their business, and those that are not are in some way operating illegally. Read more...

Whether all free zones are Designated Zones for VAT?

As per Article 51 of the Executive Regulations on VAT, Designated Zone (DZ) for VAT purposes shall be treated as outside the state and outside the implementing states. In this regard, as per Cabinet Decision No. 59, out of the 45 free zones in the UAE, 20 DZ (including JAFZA North and South) are notified for VAT purposes. Read more...

My Abu Dhabi start-up now qualifies for VAT. Can we reclaim any tax paid before registration?

Article 56 of the Decree Law allows the recovery of input tax paid on goods, services and imported goods prior to the date of VAT registration, “provided that these goods and services were used to make supplies that give the right to input tax recovery upon tax registration”. Input VAT is the VAT you are charged by your suppliers on goods and services purchased. Read more...

Can a Tax Invoice be issued electronically instead of a original hardcopy Invoice?

Article 59 section 8 of the Executive Regulations to the Decree Law contains information about issuing tax invoices, including what details need to be included and how they should be issued. It states that tax invoices may be issued by electronic means provided two conditions are met. Read more...

Does our SME have to pay VAT on a business centre contract signed last year?

The basic rule in Article 80 of the Decree Law and Article 70 of the Executive Regulations is that if a contract was concluded prior to January 1 2018 for a supply wholly or partly made after that date, and the contract does not contain clauses related to tax amounts, it shall be treated as inclusive of tax. Read more...

What do I need to include on my VAT return?

I’m due to complete my first VAT return for the quarter ending March 31. What information do I need to report in the return and where can I find guidance? Read more...

How to record and report a 'VAT only' supplier Invoice in your VAT return?

Q) I rent an office and the lease runs from September 1 until the end august each year. I have just received an invoice from my landlord for the VAT for January to August 2018. The only item on the invoice is for the VAT. I don’t know how to record this in my accounting system, as I am only able to record costs as the total costs with or without VAT. Obviously I cannot book a VAT-only invoice like this. How do I show the correct amount of VAT I can reclaim? 

A) This is a problem lots of businesses are facing in the first months after the introduction of VAT where the tax is being charged on costs recorded and fully paid for in 2017. Read more...

Federal Tax Authority Clarifies Import Procedures for Non-Registered Businesses

The Federal Tax Authority (FTA) has clarified import procedures for non-registered businesses, adopting the e-Dirham system for payments and e-Guarantee to provide guarantees, in order to ease processes for non-registered importers. Read more...

Can the Federal Authority overrule disclosures? 

The Federal Tax Authority (FTA) is authorised by the Federal Tax Law to issue a tax assessment to determine the value of payable tax and serve it on the taxable persons under circumstances where it is not satisfied by the voluntary disclosures. Read more...

Are proper tax invoices critical?

Suppliers of taxable items are required to issue proper tax invoices to customers on amount collected as tax. According to the Federal Tax law, any person who receives an amount on issuing a bill following a supply must pay this amount to the tax authority within the specified time. Read more...

Is it mandatory for all businesses to maintain tax records?

Under the Federal Tax Law, all businesses in the UAE will need to record their financial transactions and ensure that their financial records are accurate and up to date. Read more...

Can an overseas company charge my business UAE VAT?

Our business uses electronic services supplies by overseas companies and I have noticed some of this firms are invoicing us with UAE VAT and some aren't. Is it right that a US-based company is charging me UAE VAT? And what about invoices where is no UAE VAT, or, even worse, where I am charged UK VAT at 20 per cent?  Read more...

Should I bother registering my small business for VAT?

Can you explain the pros and cons of voluntary VAT registration? I have a small design business selling to both businesses and consumers mostly based in the UAE. My turnover is around Dh200,000 per year and I’m confused as to why I would want to register for VAT before I’m obliged to do so.  Read more...

Can I invoice my UAE customers in US dollars rather than dirhams?

I run a B2B marketing consultancy and have always invoiced my UAE customers in US dollars rather than dirhams. Is this allowed under the new VAT laws and what details exactly should my invoices include? Read more...



What is VAT?

Value Added Tax ( VAT) is an indirect tax that is collected incrementally, based on the surplus value, added to the price on the work at each stage. It is imposed on supplies of goods and services that are bought and sold. The ultimate consumer generally bears the cost of VAT.

What is the effective date of VAT in the UAE?

Federal Decree-Law No. (8) of 2017 on Value Added Tax was issued on 23rd August, 2017 and is effective from 1st January, 2018.

What VAT is charged on?

In principle, VAT applies to all provisions of goods and services. VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government.

What are the VAT rates?

VAT has been introduced at a standard rate of 5%. However, some goods and services are exempt or zero rated.

How is VAT collected?

Businesses are responsible for documenting their business income, costs and associated VAT. Registered businesses charge their customers VAT and pay VAT to their suppliers. The difference between these sums is claimed from or paid to the government.

How to pay VAT due to the FTA?

FTA has confirmed that various electronic channels and mechanisms have been activated to facilitate paying tax fees through a wide network of banks, exchange offices and finance companies in the state. Registrants also can pay the taxes through UAEFTS, main money transfer system, which offers direct linkage between the Central Bank of the UAE and the 'Federal Tax Authority. This allows immediate transactions of tax payments to entities covered by the system, through bank accounts and from 77 bank branches, exchange offices and finance companies around the UAE.

In an effort to streamline the process for taxable persons, the FTA provided seven different payment methods to process any payable tax to the Authority through the E-Dirham platform in the e-Services portal on its website.

The FTA chief called on businesses registered for VAT to create e-Dirham accounts as soon as possible if they do not already have one, stressing that the e-Dirham is a safe method to pay for government services and VAT. Issued by the Ministry of Finance in collaboration with First Abu Dhabi Bank, the system covers seven channels including e-Dirham Cards, Point of Sales (POS) terminals, ATMs, CDMs, Self-Service Kiosks, Mobile Payment Services, Digital Wallet and Online Direct Transfer Services that enable customers to top-up their e-Dirham cards through their bank accounts.

Is VAT in addition to customs duty?

Yes, VAT is payable in addition to the custom duties. VAT is calculated on the value including custom duties.

What is zero rated for VAT?

Zero-rated means that the goods are still VAT -taxable but the rate of VAT you must charge your customers is 0%. You still have to record them in your VAT accounts and report them on your VAT Return. Examples include: books and newspapers.

What is the difference between exempt and zero rated VAT?

The main difference between zero rate and exempt supplies is that the suppliers of zero-rated goods and / or services can still reclaim all their input VAT, but the suppliers of exempt goods are either not registered for VAT or if they are, they cannot reclaim their input VAT.

Do suppliers of zero-rated and exempt supplies charge VAT?

Suppliers do not charge tax on a zero-rated or exempt supply.

Who are suppliers of zero-rated supplies?

Registrants who could be suppliers of zero-rated services and goods include exporters, real estate developers, airlines, schools, clinics, hospitals, etc.

What are zero-rated supplies? 

Supplies subject to the zero rate are listed in Article 45 of the Federal Decree-Law no. (8) of 2017 on Value Added Tax, such as:

• Exports of goods and services.

• International transport of goods and passengers.

• Certain means of transport, such as trains, trams, vessels, airplanes.

• First sale/rent of residential buildings.

• Aircraft or vessels designated for rescue and assistance by air or sea.

• Certain investment precious metals.

• Certain healthcare services and related goods and services.

• Certain educational services and related goods and services.

What is exempt?

Exempt supplies are not taxable supplies for VAT purposes. VAT is not charged on exempt supplies and the supplier cannot recover any VAT on expenses incurred in making those exempt supplies. Exemptions will also be strictly applied as they are an exception to the normal rule that VAT should be charged.

What are Exempt Supplies?

Exempt supplies are listed in Article 46 of the Federal Decree-Law no. (8) of 2017 on Value Added Tax, such as:

• Financial services including life insurance and reinsurance of life insurance as well as financial services that are not conducted for an explicit fee, discount, commission, rebate or similar type of consideration.

• Residential buildings, other than the residential buildings which are specifically zero-rated.

• Bare land.

• Local passenger transport.

Is Registration mandatory? if so, who is required to register?

As per Article 13 of Federal Decree-Law No. 8 of 2017, Mandatory Tax Registration is required as follows:

Every Person, who has a Place of Residence in the State or an Implementing State and is not already registered for Tax, shall register in the following situations:

  • Where the total value of all supplies referred to in Article (19) exceeded the Mandatory Registration Threshold over the previous 12-month period.
  • Where it is anticipated that the total value of all supplies referred to in Article (19) will exceed the Mandatory Registration Threshold in the next thirty (30) days.

Every Person, who does not have a Place of Residence in the State or an Implementing State and is not already registered for Tax, shall register for Tax if he makes supplies of Goods or Services, and where no other Person is obligated to pay the Due Tax on these supplies in the State.

The Executive Regulation of this Decree-Law shall specify the time limits that a Person has to inform the Authority about his liability to register for Tax and the effective date of Tax Registration.

If I make zero-rated supplies, do I need to register?

As a supplier, you must register for VAT if your taxable turnover (which includes zero-rated supplies) exceeds AED 375,000 in a 12-month period, or if you expect your taxable turnover (which includes zero-rated supplies) to exceed AED 375,000 in the next 30 days. However, you can ask for an exception from registration if, and only if, you do not make any other supplies which are taxable at the standard rate of 5%. If exception from registration is granted, then you will not submit regular tax returns and you will not be able to recover input tax incurred.

If I make exempt supplies, do I need to register?

If all the supplies you make are exempt, you do not have to register for VAT. In such a case, you cannot recover tax incurred on business purchases. Examples of such would be owners of property who rent their properties for residential purposes.

What are the VAT-related responsibilities of businesses?

All businesses in the UAE will need to record their financial transactions and ensure that their financial records are accurate and up to date. Businesses that meet the minimum annual turnover requirement (as evidenced by their financial records) will be required to register for VAT. Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in case we need to establish whether they should be registered.

VAT-registered businesses generally:

  • must charge VAT on taxable goods or services they supply;
  • may reclaim any VAT they’ve paid on business-related goods or services;
  • keep a range of business records which will allow the government to check that they have got things right

If you’re a VAT-registered business you must report the amount of VAT you’ve charged and the amount of VAT you’ve paid to the government on a regular basis. It will be a formal submission and it is likely that the reporting will be made online.

If you’ve charged more VAT than you’ve paid, you have to pay the difference to the government. If you’ve paid more VAT than you’ve charged, you can reclaim the difference.

When are Registered businesses required to file VAT returns?

Taxpayers must file VAT returns with the FTA on a regular basis (quarterly or for a shorter period, should the FTA decide so) within 28 days from the end of the tax period in accordance with the procedures specified in the VAT legislation. The Tax returns shall be filed online using eServices.

Do I need to file returns if I only supply zero-rated supplies?

If you do not qualify for an exception from registration, then you must file tax returns with the FTA. You will also be entitled to recover input tax incurred on business purchases subject to the normal conditions.

Under which conditions will businesses be allowed to claim VAT incurred on expenses? 

VAT on expenses that were incurred by a business can be deducted in the following circumstances:

  • The business must be a taxable person (the end consumer cannot claim any input tax refund).
  • VAT should have been charged correctly (i.e. unduly charged VAT is not recoverable).
  • The business must hold documentation showing the VAT paid (e.g. valid tax invoice).
  • The goods or services acquired are used or intended to be used for making taxable supplies.
  • VAT input tax refund can be claimed only on the amount paid or intended to be paid before the expiration of 6 months after the agreed date for the payment of the supply.

Will businesses have to report on their business in each of the Emirates?

It is expected that businesses will need to complete additional information on their VAT returns to report revenues earned in each Emirate. Guidance will be provided to businesses with regards to this.

It is expected that the rules will be relatively straightforward for most businesses and will be based, for example, for B2C transactions, on the location of the transaction (e.g. in a retail environment, the location of the shop).

How will real estate be treated?

The VAT treatment of real estate will depend on whether it is a commercial or residential property.

Supplies (including sales or leases) of commercial properties will be taxable at the standard VAT rate (i.e 5%).

On the other hand, supplies of residential properties will generally be exempt from VAT. This will ensure that VAT would not constitute an irrecoverable cost to persons who buy their own properties. In order to ensure that real estate developers can recover VAT on construction of residential properties, the first supply of residential properties within 3 years from their completion will be zero-rated.

Will it be possible to issue cash receipts instead of VAT invoices?

A supplier registered or required to be registered for VAT must issue a valid VAT invoice for the supply. To be considered as a valid VAT invoice, the document must follow a specific format as mentioned in the legislation. In certain situations the supplier may be able to issue a simplified VAT invoice. The conditions for the VAT invoice and the simplified VAT invoice are mentioned legislation.

Will there be any VAT that businesses are not allowed to claim?

VAT will not be deductible in respect of expenses incurred for making non-taxable supplies. Furthermore, input tax cannot be deducted if it is incurred in respect of specific expenses such as entertainment expenses e.g. employee entertainment.

Will VAT be paid on imports?

VAT is due on the goods and services purchased from abroad.

In case the recipient in the State is a registered person with the Federal Tax Authority for VAT purposes, VAT would be due on that import using a reverse charge mechanism.

In case the recipient in the State is a non-registered person for VAT purposes, VAT would be paid on import of goods from a place outside the GCC. Such VAT will typically be required to be paid before the goods are released to the person.


Will there be VAT grouping?


Businesses that satisfy certain requirements covered under the Legislation (such as being resident in the UAE and being related/associated parties) will be able to register as a VAT group. For some businesses, VAT grouping will be a useful tool that would simplify accounting for VAT.


Will there be bad debt relief?


VAT registered businesses will be able to reduce their output tax liability by the amount of VAT that relates to bad debt which has been written off by the VAT registered business. The legislation will include the conditions and limitations concerning the use of this relief.

What are the cases that would lead to imposition of penalties?

Penalties will be imposed for non-compliance.

Examples of actions and omissions that may give raise to penalties include:

  • A person failing to register when required to do so;
  • A person failing to submit a tax return or make a payment within the required period;
  • A person failing to keep the records required under the issued tax legislation;
  • Tax evasion offences where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.

Which free zones are Designated Zones for VAT purposes?

Abu Dhabi: Free Trade Zone of Khalifa Port | Abu Dhabi Airport Free Zone | Khalifa Industrial Zone

Dubai: Jebel Ali Free Zone (North-South) | Dubai Cars and Automotive Zone (DUCAMZ) | Dubai Textile City | Free Zone Area in Al Quoz | Free Zone Area in Al Qusais | Dubai Aviation City | Dubai Airport Free Zone

Sharjah: Hamriyah Free Zone Sharjah Airport International Free Zone

Ajman: Ajman Free Zone

Umm Al Quwain: Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port Umm Al Quwain Free Trade Zone on Shaikh Mohammad Bin Zayed Road

Ras Al Khaimah: RAK Free Trade Zone RAK Maritime City Free Zone RAK Airport Free Zone

Fujairah: Fujairah Free Zone FOIZ (Fujairah Oil Industry Zone)

VAT for Tourists and Non-Residents

Will tourists also pay VAT?

Yes, tourists are a significant source of revenue for the UAE and will pay VAT at the point of sale. Nevertheless, we have set the VAT rate deliberately low so that VAT is a limited burden on all consumers.

Tax Refunds for Tourists Scheme

Retailers registered in the Tax Refunds for Tourists Scheme must follow 5 steps if the customer requests to make a purchase under the scheme.
The Scheme Operator will verify both the export of the goods and refund requests according to the Federal Tax Authority standards.
The maximum cash amount that can be refunded to a tourist in a 24-hour period is AED 10,000.
The minimum value of purchases subject to the refund shall be AED 250. Read more...

Will visiting businesses be able to reclaim VAT?

It is intended that we will allow foreign businesses to recover the VAT they incur when visiting the UAE. This is important as it encourages them to do business and also, because a lot of other countries have VAT systems, it protects the ability of UAE businesses to recover VAT when visiting other countries (where the rates are a lot higher). For more details, click on this LINK

Will non-residents be required to register for VAT?

Non-residents that make taxable supplies in the UAE will be required to register for VAT unless there is any other UAE resident person who is responsible for accounting for VAT on these supplies e.g. VAT under reverse charge mechanism.

Excise FAQ's

What is tax?

It is a monetary contribution imposed by a government on individuals and organizations to raise revenue to pay for public services.

What is Excise Tax?

It is a tax on specified goods that are intended for consumption in the UAE. Tax is due when goods enter free circulation in the UAE. It is not a transaction-based tax, which means that goods do not need to be sold for the tax to be due.

What is the effective date of Excise Tax in the UAE?

Federal Decree-Law No. (7) of 2017 on Excise Tax was issued on 17th August, 2017 and is effective from 1st October, 2017.

Which goods are subject to excise tax in the UAE?

  • Carbonated drinks – 50%
  • Energy drinks – 100%
  • Tobacco – 100%

On which value will excise tax apply to?

Excise tax will be applied to the retail selling price of specified goods at the applicable rates.

What are the details of retail selling price issued?

You can find a list here.

Who is required to register for excise tax?

Producers, Importers, Stock pilers and Warehouse keepers of Excisable goods.

What should businesses required to pay excise tax do?

Register with the FTA, submit monthly excise tax returns and pay the excise tax due on the same date as submitting the tax return.

When is excise tax due?

Excise tax is due when goods enter free circulation in the UAE.

Will excise tax be payable by travellers entering the UAE?

Travellers will not need to pay excise tax on goods if the value of goods is below the Custom Duty exemption threshold. Where the value of excise goods exceeds the exemption threshold, then excise tax will be due on the total value of goods.

Will refunds of excise tax be available?

Excise tax is paid once in the supply chain and a refund will be available under limited circumstances.

Can payment of excise tax be delayed until the goods are sold?

Since excise is due at the point the goods are released for consumption in the UAE, payment of excise tax cannot be delayed till goods are sold.

Will excise tax apply to goods released for consumption in a free-zone?

Yes, including a free-zone that is registered as a designated zone.

Will samples be subject to excise tax?

Regardless of whether or not they are intended for sale, excisable goods will be subject to excise tax.

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