Value Added Tax (VAT) was introduced in the UAE on January 1, 2018, at a standard rate of 5%. Understanding your VAT obligations is crucial for maintaining compliance and avoiding penalties.
Who Needs to Register?
Businesses with taxable supplies and imports exceeding AED 375,000 annually must register for VAT. Voluntary registration is available for businesses with supplies exceeding AED 187,500. Even if your business falls below these thresholds, voluntary registration can be beneficial for recovering input tax.
Filing Requirements
VAT returns must be filed quarterly for most businesses, though some may be required to file monthly. Returns must be submitted through the Federal Tax Authority (FTA) portal within 28 days of the end of each tax period.
Common Compliance Mistakes
The most frequent issues include incorrect invoice formatting, late filing penalties, failure to maintain proper records, and incorrect classification of zero-rated vs exempt supplies. Penalties for non-compliance can be substantial, ranging from AED 1,000 to AED 50,000 depending on the violation.
How Admin Scope Can Help
Our accounting team handles VAT registration, monthly bookkeeping, return preparation, and filing on your behalf. We ensure your records are always audit-ready and fully compliant with FTA regulations.