VAT in UAE, What is it?

Value Added Tax (VAT) has become a crucial part of doing business in the UAE since its introduction in 2018. For entrepreneurs, SMEs, and large corporations alike, understanding VAT compliance is not only a legal requirement but also a vital step to building credibility and financial sustainability. At ProFounders, our consultancy for VAT in UAE helps businesses navigate the complexities of VAT registration, filing, and reporting, while ensuring full compliance with the Federal Tax Authority (FTA).

VAT in UAE at a Glance

Understanding how VAT works is essential before registering:

  • Standard VAT Rate (5%) – Applied to most goods and services in the UAE. Businesses are required to collect VAT and remit it to the FTA.
  • Zero-Rated Supplies (0%) – Goods/services taxed at 0%, but businesses can reclaim input VAT. Example: exports outside the GCC.
  • Exempt Supplies – Certain goods/services are exempt from VAT (e.g., residential properties, local passenger transport, specific financial services). No VAT is charged, and input VAT cannot be reclaimed.
  • Out-of-Scope Supplies – Transactions that do not fall under UAE VAT law, such as some international services.

VAT in UAE, Who Needs to Register for it?

Registration of VAT in UAE and Dubai is based on a company’s taxable turnover.

 Any business with annual taxable supplies and imports exceeding AED 375,000 must register for VAT with the FTA

Businesses with taxable turnover above AED 187,500 can voluntarily register for VAT. This is often beneficial for startups and SMEs looking to claim back VAT on expenses

Companies with taxable supplies below AED 187,500, or those engaged only in zero-rated supplies (such as international exports), may apply for an exemption

VAT in UAE, The Benefits of Registration

Registering for VAT provides more than just compliance—it builds credibility and financial stability.

  • Obtain your official Tax Registration Number (TRN)
  • Legally charge VAT on goods and services
  • Claim input VAT on qualifying business expenses
  • Improve business reputation with suppliers, clients, and banks
  • Avoid FTA penalties and maintain long-term compliance

VAT in UAE, Our Consultancy Offering

At ProFounders, we provide end-to-end VAT solutions tailored to your business needs. Our services include:

VAT Registration (TRN Application)

Our experts manage the entire VAT registration process through the FTA portal, ensuring all documents are prepared and submitted correctly. We also assess eligibility for exemptions or voluntary registration.

VAT Returns Filing

VAT returns must be filed quarterly with the FTA. Our accountants prepare error-free VAT returns, ensuring accurate reporting of both input and output VAT, while minimizing risks of penalties.

Tax Residency Support

We help businesses and individuals secure Tax Residency Certificates from the FTA, enhancing credibility for international tax matters and double taxation agreements.

FTA Portal & Documentation Management

From account creation to ongoing compliance, we handle all interactions with the Federal Tax Authority, ensuring timely submissions and full adherence to UAE tax laws.

Ongoing Tax Advisory & Compliance

Our tax consultants provide strategic planning to optimize your VAT position, manage exemptions, and ensure your business remains compliant with evolving regulations.

Stay VAT compliant with ease

Let our experts handle the process for you

Book Your Free VAT Consultation

VAT in UAE Registration Process

The VAT registration process involves:

Eligibility Assessment

Check if you qualify for mandatory or voluntary registration

Document Preparation

Gather essential paperwork such as trade license, financial records, passport copies, Emirates IDs, and lease agreements

FTA Portal Registration

Create an account, fill in the 8-section VAT application form, and upload documents

Application Review

FTA may request additional clarifications or documents

TRN Issuance

Once approved, you’ll receive a Tax Registration Number (TRN) certificate

VAT in UAE Group Registration

Benefits

  • Simplified compliance and single VAT filing.

  • Reduction in administrative work.

  • Potential optimization of VAT recovery.

  • Companies must share strong financial, economic, and organizational ties.

  • All members must be UAE-based or have a UAE presence.
    The representative company submits the application on behalf of the group.

Among these, setting up a business is currently the fastest and most flexible way to obtain residency. With over 40 free zones across the Emirates, entrepreneurs can register a company quickly and cost-effectively.

VAT in UAE Post-Registration Compliance Checklist

Once registered, businesses must:

✔ Charge VAT correctly (5% where applicable).
✔ Maintain accurate accounting records for at least 5 years.
✔ File VAT returns quarterly via the FTA portal.
✔ Meet payment deadlines to avoid penalties.
✔ Monitor FTA updates for regulatory changes.
✔ Work with tax consultants for error-free compliance.

Why Choose ProFounders Services for VAT in UAE?

At ProFounders, we are more than consultants, we are your trusted partners

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Accuracy & Compliance

We ensure precise VAT calculations and timely submissions

Expert Guidance

Our tax advisors provide tailored solutions to optimize VAT and minimize risks

End-to-End Support

From registration to filing and deregistration, we handle everything

Peace of Mind

Outsourcing VAT consultancy allows you to focus on growth while we manage compliance

VAT in UAE - Frequently Asked Questions

No. While most goods and services are subject to 5% VAT, sectors like residential property, local passenger transport, and education are exempt, we recommend book a consultation with our team.

  • VAT: Indirect tax on goods and services (standard 5%).

  • Corporate Tax: Direct tax on company profits (9% for qualifying businesses).

Supplies such as residential rent, bare land, certain financial services, and specific government services are exempt.

  • Mandatory: AED 375,000

  • Voluntary: AED 187,500

Apply through the FTA portal. Once approved, the FTA issues your TRN.

  • If the business closes.

  • If annual taxable turnover falls below the threshold.

Timely de-registration prevents unnecessary penalties.

VAT in UAE Services with the Best!

Still have questions?

Don’t worry, ProFounders is here to help! Contact our expert team today, and we’ll guide you through every step with ease.

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VAT Consultancy in UAE