VAT in the UAE: rate, threshold and registration
The UAE VAT rate is 5%. Registration is mandatory above AED 375,000 taxable turnover over 12 months; voluntary from AED 187,500. Returns are filed quarterly and input VAT is recoverable. Late-registration penalty is AED 10,000.
What is VAT in the UAE
VAT was introduced in the UAE in 2018. It is an indirect consumption tax: businesses add 5% to the price of goods and services, collect it from customers and remit it to the Federal Tax Authority (FTA), deducting the VAT they paid to suppliers.
When you must register
| Case | Threshold |
|---|---|
| Mandatory registration | 375 000 AED |
| Voluntary registration | 187 500 AED |
| Standard rate | 5% |
The threshold is measured by taxable turnover over the last 12 months (or expected within the next 30 days). Voluntary registration can also be based on expenses — useful for startups not yet at turnover but paying input VAT.
Returns and refunds
VAT returns are filed quarterly (monthly for some) via the EmaraTax portal. If input VAT exceeds output VAT, the difference can be refunded or carried forward. Keeping valid tax invoices is essential — without them the deduction is denied.
FAQ
What is the VAT rate?
Standard is 5%. Exports and international transport are 0%; some supplies are exempt.
At what turnover must I register?
Mandatory above AED 375,000 over 12 months; voluntary from AED 187,500.
What is the late-registration penalty?
AED 10,000. Track your turnover and register on time.