Overview of VAT in the UAE
VAT (Value Added Tax) is an indirect tax levied at each stage of the supply chain. Businesses collect VAT on behalf of the government and remit it to the Federal Tax Authority (FTA). The standard VAT rate in the UAE is 5%, applicable to most goods and services.
However, certain categories such as healthcare, education, and international transport may qualify for zero-rated or exempt status, depending on conditions.
Comprehensive VAT Services in Dubai
With the introduction of Value Added Tax (VAT) in the UAE in January 2018, all businesses must comply with Federal Tax Authority (FTA) requirements to avoid penalties and maintain operational transparency. At Virtue Corporate Services, we provide complete VAT services in Dubai, from registration and return filing to advisory and compliance support.
Our team of certified tax professionals ensures your business meets all statutory VAT obligations efficiently, accurately, and on time—so you can focus on growth, not regulations.
Is VAT Applicable to Free Zone Companies in the UAE?
Yes. While designated Free Zones enjoy certain VAT benefits, VAT still applies to most Free Zone companies depending on their business model, location, and supply chain. Here’s what you need to know:
- Designated Free Zones may benefit from zero-rated VAT on goods moved between zones or exported outside the UAE.
- Non-designated Free Zones are treated like mainland entities and must comply with all VAT rules.
- VAT applies if the Free Zone company deals with mainland clients, imports goods/services, or provides taxable supplies within the UAE.
Our experts can help assess your Free Zone business’s VAT obligations and ensure compliance with FTA regulations.
Zero-Rated vs. Exempt Supplies – What’s the Difference ?
Understanding the VAT treatment of your goods or services is crucial:
These are taxable supplies, but at a 0% rate, meaning input VAT can still be recovered. Common examples
- Export of goods and services outside the GCC
- International transportation
- Certain healthcare and education services
- Supply of precious metals (e.g., gold, silver)
These supplies are not subject to VAT, and input VAT cannot be claimed. Examples include
- Certain financial services (e.g., issuing loans, insurance)
- Residential property leases (subject to conditions)
- Local passenger transport
Conditions for Export of Services to Qualify as Zero-Rated
To benefit from the 0% VAT rate on exported services, the following conditions must be met
- The recipient is located outside the UAE at the time of service provision.
- The recipient is not a resident of the UAE and is not present in the UAE when the service is performed.
- The service must not be directly connected to real estate or goods located in the UAE.
We ensure your service exports are correctly documented and classified for zero-rating, helping you avoid unnecessary tax liabilities.
Advantages of Our VAT Services in Dubai
Partnering with Virtue Corporate Services for VAT ensures
We handle end-to-end VAT registration with the FTA, ensuring all documentation and compliance requirements are met.
Avoid costly penalties with timely and error-free filing of VAT returns on a monthly or quarterly basis.
Our tax consultants help you structure your business to optimize VAT recovery and reduce liabilities.
Stay up to date with changing FTA regulations with our proactive compliance support.
We prepare you for audits and represent you during tax reviews to ensure full transparency.
Tailored advice for retail, trading, logistics, real estate, services, e-commerce, and more.
VAT Registration Requirements in the UAE
VAT registration in the UAE can be mandatory or voluntary, based on a business’s taxable turnover.
Mandatory VAT Registration
A business must register for VAT if:
- Annual taxable turnover exceeds AED 375,000
- It imports goods or services that are subject to VAT
- It expects to cross the mandatory threshold in the next 30 days
Voluntary VAT Registration
Businesses can opt for voluntary registration if:
- Annual taxable turnover or expenses exceed AED 187,500
- They wish to claim input VAT on business expenses
- They want to enhance credibility and work with VAT-registered clients
Documents Required for VAT Registration
VAT registration in the UAE can be mandatory or voluntary, based on a business’s taxable turnover.
- Trade license copy
- Passport & Emirates ID of shareholders
- Memorandum of Association (MOA)
- Proof of business address (e.g., tenancy contract, utility bill)
- Bank account details
- Financial statements or revenue projections
- Customs registration (if applicable)
- Description of business activities
We’ll guide you through every step and ensure all documents are correctly prepared and submitted.
VAT Registration Process in the UAE
Our streamlined VAT registration process includes
We evaluate your business activities and determine whether registration is mandatory or voluntary.
We create and manage your account on the Federal Tax Authority platform.
Complete preparation and upload of required documents.
We create and manage your account on the Federal Tax Authority platform.
Frequently Asked Questions
Businesses with a taxable turnover exceeding AED 375,000 annually are required to register for VAT. If your turnover is between AED 187,500 and AED 375,000, you can voluntarily register. Registration helps you recover input VAT and enhances your business credibility.
Zero-rated supplies are taxed at 0% VAT, allowing you to claim input VAT on related expenses (e.g., exports, education, healthcare).
Exempt supplies are not taxed, but you cannot claim input VAT on associated expenses (e.g., residential rent, certain financial services).
Yes. Free Zone companies must register for VAT if they meet the criteria, especially if they:
- Deal with mainland clients
- Import or export goods
- Exceed the mandatory turnover threshold
Companies in designated Free Zones may be eligible for zero-rated VAT on certain transactions.
It typically takes 5–20 business days for the Federal Tax Authority (FTA) to process and issue a Tax Registration Number (TRN), depending on documentation and business structure.
Failure to register on time can result in penalties starting from AED 10,000, plus additional fines for late filing, incorrect reporting, or tax evasion. Timely registration ensures full compliance and avoids legal risks.
Yes, VAT paid on eligible business-related expenses (input VAT) can be recovered, provided you have proper tax invoices and the expenses are linked to taxable business activities.
VAT returns must typically be filed quarterly (or monthly for larger businesses), depending on your assigned tax period. Returns are submitted online via the FTA portal within 28 days of the end of each tax period.
Key documents include:
- Trade license
- Passport & Emirates ID of owners
- MOA or AOA
- Lease agreement or Ejari
- Company bank details
- Financial statements or revenue estimates
- Customs details (if applicable)
- Business activity description
Get Started with Virtue – Your VAT Compliance Partner in the UAE
Avoid VAT penalties, stay compliant, and focus on your core business with Virtue Corporate Services as your trusted VAT partner in Dubai. Whether you need VAT registration, return filing, or tax advisory, our team is ready to support you with precision and professionalism.