VAT
VAT registration in Dubai, then returns four times a year, filed right the first time.
VAT has been 5% since 2018 and the rules are settled. What goes wrong is the routine, which we run as a registered Tax Agent.
Registration
Two thresholds, and a clock that starts before you notice.
Registration is mandatory once taxable supplies pass AED 375,000 in the last 12 months, or when you expect to pass it in the next 30 days. The second test catches new businesses: a signed contract can put you over the line before the first invoice is paid.
Voluntary registration opens at AED 187,500. Businesses that buy from or sell to VAT-registered companies are usually better off registered early, because input tax can only be recovered once you are in the system.
The FTA's processing standard for a registration is 20 business days. The application asks for the trade license, the owners' identity documents, bank details, and a turnover schedule with evidence. Missing evidence is the usual reason an application bounces, so we assemble the file first.
What we do at registration
- Check the 12-month and 30-day tests against your actual invoices
- Prepare and submit the application on the FTA portal as your Tax Agent
- Set the tax period and the first return date
- Set up the VAT codes in Zoho Books, QuickBooks or Odoo so the first return comes out of the system, not a spreadsheet
The return cycle
Quarterly, due on the 28th of the month after the quarter.
Each return needs the ledgers closed for the period, every tax invoice on file, and the bank reconciled so the tax can be tied to real money. We close the period in your software, prepare the return, send it for your approval, then file and confirm the payment reference.
Most businesses are on quarterly periods. The FTA sets your periods when you register, so check the dates on your registration certificate. Payment is due with the return.
- 28 AprQuarter 1 return and paymentJanuary to March
- 28 JulQuarter 2 return and paymentApril to June
- 28 OctQuarter 3 return and paymentJuly to September
- 28 JanQuarter 4 return and paymentOctober to December, filed in the new year
Penalties
Late once is expensive. Late twice is double.
| Failure | Penalty |
|---|---|
| Late return, first time | AED 1,000 |
| Late return, repeated within 24 months | AED 2,000 |
These are the penalties for filing late. An error in a filed return is a separate matter, which is why a wrong return should be corrected as soon as it is found rather than left for the FTA to find.
Refunds and corrections
Money the FTA owes you, and returns that need fixing.
If input tax exceeds output tax in a period, the return shows a refund position. You can carry it forward or apply for the refund. Exporters and businesses spending on setup before they sell are the usual cases. The FTA asks for the invoices behind the claim, so the file has to be ready before the application goes in.
If a filed return is wrong, the route to fix it is a voluntary disclosure. It is a formal correction on the FTA portal, with the reason and the supporting documents. We prepare it, quantify the difference and file it as your Tax Agent. Owners are often nervous about drawing attention. A disclosure you make is on your terms, with your explanation attached. An error the FTA finds is on theirs.
Filed by a Tax Agent
The difference between help with a form and a name the FTA can hold to account.
Anyone can type numbers into the FTA portal. A registered Tax Agent is on the FTA's public register, is linked to your tax account, corresponds with the FTA on your behalf, and answers to the FTA for what is filed. Our Tax Agent holds TAAN 20024196.
Excise tax · UAE
If you import, make or hold excise goods, there is a second monthly tax.
Excise tax has applied in the UAE since 1 October 2017 under Federal Decree-Law 7 of 2017. It is charged on a short list of goods, at 50% or 100% of the price, on top of VAT. There is no registration threshold. A business that imports, produces or stockpiles excise goods, or releases them from a designated zone, must register with the Federal Tax Authority before it does so, not after the first shipment.
Returns are monthly. Each return and its payment are due by the 15th of the month after the tax period, so the January return is filed and paid by 15 February. Importers also declare each shipment before it clears customs, and the declaration has to agree with the return.
| Excise goods | Rate |
|---|---|
| Sweetened drinks | By sugar, per litre: nothing under 5g per 100ml, AED 0.79 from 5g to under 8g, AED 1.09 at 8g or more |
| Tobacco and tobacco products | 100% |
| Energy drinks | 100% |
| Electronic smoking devices and the liquids used in them | 100% |
What we do as Tax Agent
- Registration. The application on the FTA portal, with the product list and the evidence, before the first import or the first production run.
- Monthly returns. The return prepared from the import declarations and the stock records, filed and paid by the 15th.
- Deregistration. When you stop dealing in excise goods, the application to close the registration and the final return.
- Refunds. Where excise tax has been paid on goods later exported or otherwise refundable, the claim with the documents behind it.
- BeforeRegistrationBefore importing, producing or stockpiling excise goods
- 15thMonthly return and paymentOf the month after each tax period
E-invoicing, 2026 to 2027
Every business-to-business invoice will soon pass through an accredited provider.
The UAE is moving to electronic invoicing in stages. Each business must appoint an Accredited Service Provider, an ASP, and connect its invoicing software to it by a fixed date. Businesses with revenue of AED 50 million or more go first.
| Who | Appoint an ASP by | Go live |
|---|---|---|
| Pilot | 1 Jul 2026 | |
| Revenue of AED 50 million or more | 30 Oct 2026 | 1 Jan 2027 |
| Everyone else | 31 Mar 2027 | 1 Jul 2027 |
| Government entities | 1 Oct 2027 |
What it means in practice: your invoicing must come out of software that can talk to an ASP. If you still invoice from Word or Excel, 2026 is the year to move to Zoho Books, QuickBooks or Odoo, and we set that up as part of the bookkeeping.
Questions
What owners ask us about VAT.
- 01
We are just under AED 375,000. Should we register anyway?
Above AED 187,500 you can. It is usually worth it if your customers are VAT-registered, because they recover the 5% and you recover the VAT on your costs. If you sell to consumers, staying out until you must register keeps your prices 5% lower. We will look at your last 12 months and tell you.
- 02
What do you need from us each quarter?
Every sales and purchase invoice for the period, the bank statements, and any credit notes. If we keep the books, we already have all of this and the quarter closes without you sending anything.
- 03
We filed a return with a mistake. What now?
File a voluntary disclosure. It corrects the return formally, with the reason and the evidence. The sooner it goes in, the better. Send us the return and the invoices in question and we will quantify the difference the same week.
- 04
What does it cost?
A fixed fee, quoted within one business day of seeing your license and last return, before any work starts.
Related
What usually comes with it.
Corporate tax
The annual return, from the same books
ServiceBookkeeping and CFO support
Books closed monthly, so the return is ready
ServiceExternal and internal audit
Audited statements where the law asks for them
ServiceFTA penalties, disclosure and reconsideration
When a return or a registration is already late
Contact us
Send us your last return and your license. We will tell you what is due, and what it costs.
- Phone +971 4 886 4599
- WhatsApp +971 56 620 0575
- Email info@cpaauditing.ae
- Office 902, Makateb Building, Al Maktoum Road, Port Saeed, Dubai, P.O. Box 45452