Everything You Need to Know About VAT for Businesses in the UAE
Since VAT was introduced in the UAE in 2018 at a standard rate of 5%, businesses have had to adapt their invoicing, accounting and reporting processes. Proper VAT management avoids fines and ensures smooth operations. This guide explains what VAT is, how to comply with FTA rules, common challenges, and how YAS ACCOUNT simplifies VAT for UAE companies.
What is VAT?
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VAT (Value Added Tax) is an indirect tax applied to most goods and services.
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In the UAE, the standard rate is 5% on taxable supplies.
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VAT is collected from customers and remitted to the Federal Tax Authority (FTA).
Steps to Comply with VAT in the UAE
Registration with the FTA
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Mandatory registration threshold: businesses whose taxable supplies and imports exceed AED 375,000 in the previous 12 months (or expected to exceed it).
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Voluntary registration is possible if turnover is above AED 187,500.
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Issuing VAT-Compliant Invoices
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A tax invoice must include: supplier TRN (tax registration number), invoice date, invoice number, customer details (if applicable), taxable amount and the VAT amount.
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Keep original copies and electronic records according to FTA retention rules.
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Filing VAT Returns
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VAT returns are typically submitted quarterly (every 3 months) unless otherwise specified.
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Returns must include taxable supplies, input tax, output tax and the net VAT payable/refundable.
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Pay any VAT due by the filing deadline to avoid penalties.
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Common VAT Challenges
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Misreporting taxable transactions
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Late VAT filings and penalties
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Incomplete record keeping
How YAS ACCOUNT Helps
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Automates VAT calculations
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Generates FTA and ZATCA-compliant reports
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Sends filing deadline reminders
