Question 1

What is the VAT rate in the UAE?

Accepted Answer

The standard VAT rate is 5%. Certain supplies — such as specified exports, international transport, some healthcare and education, and newly constructed residential property in defined cases — are zero-rated, while others (for example bare land, local passenger transport and some financial services) are exempt.

Question 2

When must I register for VAT?

Accepted Answer

Registration is mandatory when taxable supplies and imports exceeded AED 375,000 in the previous 12 months, or are expected to exceed AED 375,000 within the next 30 days. Voluntary registration is available where taxable supplies, imports or taxable expenses exceed AED 187,500.

Question 3

How often do I file VAT returns?

Accepted Answer

The FTA assigns each registrant a monthly or quarterly tax period. The return and any payment are due within 28 days of the end of that tax period, filed through EmaraTax.

Question 4

What is the difference between zero-rated and exempt supplies?

Accepted Answer

Zero-rated supplies are taxable at 0% and still count towards the registration thresholds, and input tax on related costs is generally recoverable. Exempt supplies are outside the charge to VAT and input tax attributable to them is generally not recoverable.

Question 5

Can I recover input VAT on all business costs?

Accepted Answer

Input tax is recoverable where the cost relates to making taxable supplies and you hold a valid tax invoice. Recovery is blocked or restricted for certain items, including entertainment provided to non-employees and, in most cases, motor vehicles available for personal use.

Question 6

What must a UAE tax invoice contain?

Accepted Answer

A tax invoice must show the words "Tax Invoice", the supplier's name, address and TRN, the customer's details, an invoice date and sequential number, a description of the goods or services, the amount excluding VAT, the VAT rate and amount, and the total payable in AED where applicable.

Question 7

How do I correct a mistake in a submitted VAT return?

Accepted Answer

Errors are corrected by submitting a voluntary disclosure (Form 211) in EmaraTax, with supporting explanation. Filing promptly generally limits exposure to administrative penalties.

Question 8

What is the UAE Corporate Tax rate?

Accepted Answer

0% applies to taxable income up to AED 375,000 and 9% to taxable income above that threshold, under Federal Decree-Law No. 47 of 2022 and Cabinet Decision No. 116 of 2022. Large multinational groups may separately fall within the 15% Domestic Minimum Top-up Tax.

Question 9

Who has to register for Corporate Tax?

Accepted Answer

All UAE juridical persons — including free zone companies — and non-resident persons with a UAE permanent establishment or nexus must register, as must natural persons carrying on a business with turnover above AED 1,000,000 in a calendar year. Registration is required even where the expected tax is nil.

Question 10

When is the Corporate Tax return due?

Accepted Answer

The return must be filed and any tax paid within 9 months of the end of the relevant tax period. For a tax period ending 31 December, that means 30 September of the following year.

Question 11

What is Small Business Relief?

Accepted Answer

Under Ministerial Decision No. 73 of 2023, a resident taxable person with revenue of AED 3,000,000 or less in the current and all previous tax periods may elect to be treated as having no taxable income. The election is made in the return, is available for tax periods ending on or before 31 December 2026, and is not open to Qualifying Free Zone Persons or members of large multinational groups.

Question 12

How are free zone companies taxed?

Accepted Answer

A Qualifying Free Zone Person may benefit from 0% on qualifying income and 9% on non-qualifying income, provided it maintains adequate substance, derives qualifying income, complies with transfer pricing requirements and does not elect to be taxed at the standard rates.

Question 13

Is accounting profit the same as taxable income?

Accepted Answer

No. Taxable income starts from accounting profit prepared under IFRS and is then adjusted for items such as exempt income, non-deductible expenditure, interest limitation rules, related-party adjustments, reliefs and carried-forward tax losses.

Question 14

Which expenses are not deductible?

Accepted Answer

Common non-deductible items include 50% of client entertainment costs, fines and penalties (other than compensatory damages), donations to non-approved bodies, dividends and profit distributions, and expenditure not incurred wholly and exclusively for the business.

Question 15

Do I still need audited financial statements?

Accepted Answer

Corporate Tax filings must be based on financial statements. Audited statements are required for taxable persons with revenue above the threshold set by ministerial decision and for tax groups; many businesses also need an audit for licensing, banking or ICV purposes.

Question 16

What records must I keep and for how long?

Accepted Answer

Accounting records, invoices, contracts, customs documentation and supporting schedules must be retained for at least 5 years for VAT purposes and 7 years from the end of the tax period for Corporate Tax, and be produced to the FTA on request.

Question 17

What happens if I file or pay late?

Accepted Answer

The FTA imposes fixed and escalating administrative penalties for late registration, late filing, late payment and incorrect returns. Amounts are set by cabinet decision, so the current penalty schedule on tax.gov.ae should always be checked.

Question 18

What is EmaraTax?

Accepted Answer

EmaraTax is the FTA's digital platform for registration, returns, payments, refunds, voluntary disclosures and correspondence across VAT, Corporate Tax and Excise Tax. There are no offline return forms — all filings are electronic.

Question 19

Can Expens Accounting file on our behalf?

Accepted Answer

Yes. We handle VAT and Corporate Tax registration, bookkeeping, return preparation and submission, reconciliations, voluntary disclosures and FTA correspondence, and we can act alongside your existing finance team.

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