VAT in the UAE

• Value Added Tax (VAT) is an indirect tax placed in more than 180 countries on the consumption and use of goods and services at each stage of the supply chain, from the extraction of raw materials to the point of sale. 

 It is mandatory for a business to register, if it’s annual taxable supplies and imports amount to a value greater than 375,000 dirhams.  

Businesses will need to create an account through the e-services section on the Federal Tax Authority website.

VAT-registered businesses collect the amount that consumers bear on behalf of the government. The tax is primarily imposed on consumers, both residents and tourists, as well as tax-registered businesses at a rate of 5% . 

A consumer bears a 5% increase in the cost of taxable goods and services. A tax-registered business bears a 5% on goods and/or services at each step of the supply chain.