FAQs About UAE VAT
If a company purchases goods worth AED 10,000 inclusive of the 5% VAT, the same products are sold to the end consumers at a VAT inclusive price of AED 20,000.
The input tax is collected at the standard rate of 5 % of AED 10,000, i.e., AED 500.
The output tax is collected 5 % of the AED 20,000 that will amount to, i.e., AED 1000.
The business’s tax liability is the difference between the input and output VAT: – AED ( 1000-500) = AED 500.
As a business resident in the UAE, you are eligible to apply for voluntary registration if –
Your turnover with supplies of taxable goods and services or expenses was more than AED 187 500 in the last 12 months.
The turnover or expenses is expected to be more than AED 187,500 in the next 30 days.
Taxable businesses collect VAT from the end-consumers on behalf of the government. The consumers pay for goods with a standard 5 % tax inclusive of the price of the goods.
As per the VAT Laws in the UAE, a standard rate of 5 % VAT is applicable on the taxable supplies on tax-registered businesses. The 5 % tax is applied to the taxable supply of goods and services at each supply chain step.
Below is defined a quick navigation process of the site. The taxpayers have to visit the official FTA website and visit the eServices section.
Signup for an e-services account/ Login to an existing e-services account.
Verify the services account by receiving and taking the appropriate action on the email received on the registered email address
Click on the button- Register for VAT.
Eight sections need to be filled in the VAT registration form. Users can move from one area to the next only after completing all the required fields; otherwise, a pop-up message will prompt the user to achieve the same.
Save the progress by clicking on Save as Draft
Click on Save and review button on the form.
Click on Submit for Approval button.
After submitting the form, the status of your profile on the Dashboard will change to Pending.
The FTA will send an email confirming the receipt of the application.
If further information is required for verification, the FTA will email asking to furnish the required details.
Supplies refer to goods and services or transactions that are subjected to any VAT categories- the 5 % standard rate, the Zero tax, or fall under the tax exemption category as per the VAT Law.
What are Goods and Services?
Goods are defined as any tangible product that is sold for cash or consideration. Services are non-tangible, e.g., beauty services, home cleaning services, etc.
Covid-19 prevention products- sanitizers, Masks, Disposable suits, gloves, etc.
Some educational services and allied products.
Precious metals like Gold, Silver, and Platinum bought for investment purposes.
Healthcare services and products.
Newly Constructed buildings are put on sale for the first time within three years of the construction.
Aircraft and ships
Means of transport such as aircraft, vessels used for rescue operations.
International GCC passenger and goods transport services.
Export outside the GCC.
Rent accrued from the residential building except those that have been subjected to the Zero % Vat category.
Transport of local passengers.
Financial services such as life insurance are included that are not provided at a discounted rate.
A tax period is a particular period during which the payable tax has to be calculated and paid.
The FTA has described different deadlines for taxable businesses. The standard rule is to file the VAT returns within 28 days at the end of the tax period. The tax period has been defined for each business.
- Businesses with an annual turnover below AED 150 million will have to file VAT returns quarterly.
- Businesses with more than AED 150 million annual turnovers have to file the VAT return monthly.