VAT Services in UAE

VAT (Value Added Tax) in the UAE is a 5% indirect consumption tax applied to most goods and services supplied within the country. Registered businesses collect VAT on taxable supplies and pay it to the Federal Tax Authority (FTA), while reclaiming VAT paid on eligible business purchases. VAT was introduced on 1 January 2018 under Federal Decree-Law No. (8) of 2017 on Value Added Tax. It is filed quarterly through the FTA's EmaraTax portal.

A business must register for VAT in the UAE if its taxable supplies and imports exceed AED 375,000 in the past 12 months, or are expected to exceed this threshold in the next 30 days. Businesses with taxable supplies between AED 187,500 and AED 375,000 can voluntarily register. Registration must be completed via the FTA portal within 30 days of exceeding the threshold. Late registration results in an AED 10,000 administrative penalty. HAMG handles VAT registration applications and ensures timely, accurate submission.

VAT returns are typically filed quarterly through the FTA's EmaraTax system. Each VAT return (Form 201) must be submitted within 28 days after the end of the tax period and any VAT due must be paid by the same deadline. Some businesses may be required to file monthly depending on their size and FTA classification. Failure to file on time results in penalties starting from AED 1,000 for first offence. HAMG ensures all VAT returns are prepared accurately and submitted on time.

The FTA imposes strict penalties for non-compliance, including: AED 10,000 for late VAT registration, AED 1,000–AED 2,000 for late VAT return filing, 2% immediate penalty, 4% after 7 days, then 1% daily up to 300% of unpaid VAT for late payment, AED 10,000–AED 50,000 for failing to maintain proper VAT records, and additional fines for incorrect returns or record submission. HAMG's VAT compliance services help businesses avoid all FTA penalties through accurate, timely filing and record-keeping.

A VAT-registered business can claim a refund if the input VAT paid on purchases exceeds the output VAT collected on sales. Refund claims must be submitted through the FTA portal (EmaraTax) and supported by accurate documentation including tax invoices, purchase records, and bank statements. The FTA conducts a review before approving refunds, which may include requesting additional documentation or conducting a tax audit. HAMG assists businesses with refund eligibility assessment, documentation preparation, and FTA follow-up to maximize approved refunds.

VAT-registered businesses must maintain complete and accurate records of their supplies, tax invoices, receipts, and related documentation for at least 5 years. This includes tax invoices for all taxable supplies, credit notes and debit notes, import and export documents, VAT return submissions, and bank statements. Failure to retain records can result in penalties of up to AED 50,000 and increased FTA scrutiny. Proper documentation is also essential for VAT refund claims and FTA audits. HAMG's accounting and bookkeeping services ensure all records are maintained in full compliance with FTA requirements.