The basics: rate and scope
VAT is charged at 5% on most goods and services (standard-rated). Some supplies are zero-rated (charged at 0%, but still reportable) or exempt (outside VAT). Getting the treatment right per item is what keeps your returns accurate.
Registration thresholds
- Mandatory registration: taxable turnover above AED 375,000 per year.
- Voluntary registration: taxable turnover (or expenses) above AED 187,500.
- Once registered, you receive a TRN (Tax Registration Number) to show on tax invoices.
The VAT201 return
Each period you report output VAT (VAT you charged), input VAT (VAT you can recover on business expenses), and the net VAT payable or refundable. Credit notes reduce your output VAT. Fatoora builds these figures automatically so filing is a quick review rather than a spreadsheet marathon.
Common mistakes to avoid
- Missing or non-sequential invoice numbers
- Forgetting to show your TRN on tax invoices
- Applying the wrong VAT treatment (standard vs zero-rated vs exempt)
- Not adjusting output VAT for credit notes
- Filing or paying after the deadline (penalties apply)
This page is general information about UAE tax and compliance, not tax or legal advice. Rules and dates can change — always confirm with the Federal Tax Authority (FTA) or a registered tax agent for your situation.
Frequently asked questions
What is the VAT rate in the UAE?+
The standard VAT rate is 5%. Some supplies are zero-rated (0%) or exempt, depending on the type of goods or services.
Who must register for VAT in the UAE?+
Registration is mandatory once taxable supplies and imports exceed AED 375,000 per year, and voluntary from AED 187,500. Confirm current thresholds with the FTA.
How often do I file VAT?+
Most businesses file the VAT201 return quarterly; some file monthly. The FTA sets your period based on your registration.