02 / IN DETAILThe detail that matters.
| Treatment | VAT charged | Input VAT recovery | Examples |
|---|---|---|---|
| Standard | 5% | Yes | Most goods & services |
| Zero-rated | 0% | Yes | Exports, healthcare, education |
| Exempt | None | No | Bare land, residential, local transport |
VAT is only 5%, but the penalties for getting the mechanics wrong dwarf the rate itself.
03 / FROM THE SOURCESWhat the official documents say.
VAT is a 5% tax added to most goods and services in the UAE. Businesses collect it from customers and pass it to the Federal Tax Authority, while recovering the VAT they paid on their own purchases.
Registration becomes mandatory once your taxable turnover passes AED 375,000 over twelve months. You can register voluntarily from AED 187,500, which lets a new business recover input VAT early.
Some supplies are zero-rated — exports, international transport, and most healthcare and education — so you charge 0% but still recover input VAT. Others are exempt, such as bare land, residential property and local passenger transport, where input VAT cannot be recovered.
You must issue a valid tax invoice within 14 days of a supply, and file VAT returns — usually quarterly, monthly for very large businesses — paying any net VAT due by the deadline to avoid penalties.
Related companies under common control can form a VAT group and file a single return, which removes VAT on transactions between group members and simplifies compliance.
04 / THE KEY FACTSThe figures, with their sources.
| Fact | Value | Source |
|---|---|---|
| Standard VAT rate | 5% | Federal Decree-Law No. 8 of 2017 |
| Mandatory VAT registration threshold | AED 375,000 annual turnover | UAE FTA |
| Voluntary registration threshold | AED 187,500 annual turnover | UAE FTA |
| Zero-rated supplies | Exports, healthcare, education, international transport | UAE FTA — VAT Law |
| Exempt supplies | Bare land, residential buildings, local passenger transport | UAE FTA — VAT Law |
| Tax invoice issuance deadline | 14 days from date of supply | UAE FTA — VAT Executive Regulation |
| VAT return filing frequency | Quarterly (monthly for large businesses) | UAE FTA |
05 / SOURCES & DOWNLOADSKnow what this guide rests on.
Legal basis: 4 primary source documents. Laws change; verify with the issuing authority before acting.