United Arab Emirates United Arab Emirates

Goods

Web: https://tax.gov.ae/en

 

Standard rate

5%

Zero rate

  • Education
  • Healthcare services and related medicines and medical equipment
  • Means of air, sea, and land transportation e.g. ships, aircraft.
  • International transportation
  • First sale of new residential property (Within 3 years of construction)
  • Crude oil and natural gas
  • Exports outside of GCC* states
  • Investment in precious metals (gold, silver, and platinum)

* Gulf Cooperation Council

Deductible VAT

VAT deductible for supplies or import transactions.

Threshold

In contrast, if the person is not resident in the UAE, the person is required to register for VAT if it makes any taxable supplies in the UAE, unless there is another person in the UAE who is responsible for accounting for VAT on such activities. As such, for non-resident suppliers, the registration threshold is, in effect, nil.

Registration procedure

To register, you need to create an account on the portal of the tax authority and send a questionnaire with information about director of company, business description and contact information.

In order to register, you need to have scanned copies of the following:

  1. Business or Trade license (Articles of incorporation)
  2. Passport of Manager/Owner.
  3. Passport copy of authorized signatory (if different from Manager).
  4. Proof of authorizing manager/authorized signatory (e.g. articles of association, power of attorney attested by notary).

Tax representative

If you are an overseas company applying to register for VAT in the UAE, you may choose to appoint a tax agent in the UAE.

VAT returns filing date

Taxable businesses must fill and send VAT returns to the tax authority on a regular basis and usually within 28 days after the end of the “tax period”.

How to determine your period:

  • Quarterly: enterprises with an annual turnover of less than AED 150 million
  • Monthly: enterprises with an annual turnover of AED 150 million.

The Tax Agency may, at its discretion, assign a different tax period for a particular type of business.

VAT payment date

The deadline for tax payment coincides with the last day of filing a tax return.

Penalties

Late submit the declaration before the deadline specified in the Tax Law:

  • 1,000 AED for the first time.
  • 2,000 AED in case of repetition within 2 years.
Digital services

Web: https://tax.gov.ae/en

 

VAT Standard rate

5%

Threshold

AED 0

E-services list

  • domain name provision service, web-hosting and remote maintenance of programs and equipment;
  • supply and updating of software;
  • provide access of images, text, and information provided electronically, such as photos, screensavers, electronic books, and other electronic documents and files;
  • supply of music, movies, and games on demand;
  • supply of e-magazines;
  • supply of advertising space on a website and any rights associated with such advertising;
  • provide access of political, cultural, artistic, sporting, scientific, educational, or entertainment broadcasts, including broadcasts of events;
  • live streaming via the Internet;
  • distance learning service; and
  • services of an equivalent type that have a similar purpose and function.

Pieces of evidence

For the purpose of determining the location of the recipient, some of the factors which may be indicative of the recipient’s location are:

  • the internet protocol (“IP”) address of the device used by the recipient to receive the electronic service;
  • the country code stored on the SIM card used by the recipient to receive the electronic service;
  • the place of residence of the recipient;
  • the billing address of the recipient; and / or
  • the bank details used by the recipient for the payment.

Registration procedure

The registration application must be submitted online. To do this, you need to create an account on the portal, fill out a questionnaire and attach the necessary documents.

VAT returns filing date

After VAT registering in the UAE, you need to file a VAT declaration and make the appropriate VAT payments within 28 days from the end of the tax period. The standard period is a month.

VAT payment date

Pay the VAT due before the deadline for submitting declarations.

Penalties

2% penalty on the amount of unsettled tax

4% monthly penalty is due after one month from the original due date of payment, then on the same date monthly thereafter.

Keeping records

There is a strict requirement for the maintenance of all the records for a minimum of 5 years. Annual accounts as well as any additional information necessary to verify entries should be maintained. General ledgers, purchase day books, invoices and credit notes issued and received, VAT ledgers, VAT calculations, adjustments, record of supplies, exports, and imports, etc. should all be maintained and readily available to be presented to the FTA if the case of any VAT audit.