Value Added Tax

Steer through the UAE’s VAT Landscape with Strategic Accuracy

Following the introduction of Value Added Tax (VAT) at a rate of 5% in the UAE in 2018, the scenario for tax compliance has transformed significantly. Although the rate appears minimal, the intricacies are found in its implementation, reporting, exemptions, and industry-specific regulations. From inter-emirate trade and e-commerce to international services and real estate, VAT in the UAE presents a multifaceted compliance challenge.

At Finjuris Global, we adopt a comprehensive approach to VAT, beginning with registration and system configuration, extending to ongoing return submissions, reconciliations, adjustments, audits, and dispute resolution. Whether you're a small business or a global corporation, we customize your VAT strategy to fit your operational structure, contractual agreements, and business objectives.

What is VAT in the UAE?

VAT is an indirect tax imposed at every stage of the supply chain, based on the value added. It is applicable to the sale of goods and services, import/export activities, and some financial and real estate transactions.
The VAT rates applied in the UAE are:

5% Standard Rate

0% on Exports, international transport, education, and healthcare (subject to specific conditions)

Exemptions for residential leasing, financial services, and some investment-grade metals

All entities registered for VAT must keep accurate records, issue tax invoices, and submit returns (either monthly or quarterly) via the Federal Tax Authority (FTA) portal.

Our VAT Services

VAT Registration & Deregistration

We evaluate your eligibility for VAT based on revenue thresholds (AED 375,000 mandatory; AED 187,500 voluntary) and oversee your registration process with the FTA, ensuring that your business activities and group structures are classified correctly.

Transaction Analysis & VAT Mapping

We analyze your contracts, invoices, and supply chain to establish the appropriate VAT treatments (standard-rated, zero-rated, exempt, or out-of-scope) and determine if VAT should be charged, recovered, or adjusted accordingly.

Ongoing VAT Return Filing

We manage the preparation and submission of your periodic VAT returns (quarterly/monthly) to ensure:

Reconciliation of sales and purchase accounts
Matching of input and output VAT
Adjustments for reverse charges
Precise reporting of inter-emirate supplies

VAT Group Structuring

We provide assistance in forming VAT groups to streamline filings for corporate entities, enhancing cash flow and eliminating intra-group VAT charges, particularly beneficial for holding and multi-subsidiary structures.

FTA Audit Readiness & Dispute Management

We support you in addressing FTA audits, clarifications, penalty notices, or refund denials. Our team prepares comprehensive audit documentation, VAT reconciliations, and system trails to ensure a smooth regulatory defense.

Voluntary Disclosures & Corrections

In cases of past filing errors, we prepare voluntary disclosures (VDs) and correction submissions to reduce penalties and correct compliance issues.

VAT in E-Commerce & Cross-Border Trade

We manage the complexities specific to sectors such as:

Drop shipping and third-party fulfillment
VAT implications on digital platforms
Classification for imports/exports and customs codes
Treatment in Free Zones and mapping of Designated Zones

Invoicing, Documentation & Staff Training

We ensure that all your documentation—from tax invoices and credit notes to VAT accounting software—complies with FTA regulations. Additionally, we offer training for internal teams on invoicing procedures, reporting, and strategies for error prevention.

Why does it matter?

VAT in the UAE isn’t just a filing requirement; it’s a strategic pillar of your financial integrity.

Since its implementation in 2018, VAT has evolved into one of the most monitored and penalized areas of regulatory compliance by the Federal Tax Authority (FTA). Incorrect VAT treatment, especially across complex sectors like real estate, healthcare, e-commerce, and logistics, can trigger audits, backdated tax liabilities, reputational damage, and even business disruption.

With VAT thresholds now applying to even mid-sized enterprises, staying compliant requires more than basic invoicing or quarterly return filing. It demands accurate mapping of your supply chain, appropriate tax categorization, robust documentation, and quick responsiveness to changing rules or system flags.

Why VAT Compliance Matters?

Avoid Penalties & Fines

Incorrect or late submissions can result in AED 1,000–5,000 in fines per violation.

Protect Your Tax Recoverability

Mismatches in invoicing or incorrect treatment can block your input VAT claims.

Enable Clean Audits

FTA audits often review VAT treatment alongside Transfer Pricing, ESR, and Corporate Tax.

Enhance Cash Flow

A well-managed VAT cycle ensures timely refunds, lower working capital strain, and stronger financial transparency.

Boost Investor Confidence

Due diligence processes now commonly include a review of indirect tax risks and liabilities.

Why should you choose Finjuris for VAT?

Reliable Compliance. Strategic Optimization. Real-World Solutions.

At Finjuris Global, we don’t offer one-size-fits-all compliance. We combine deep UAE regulatory knowledge with industry-specific insight to ensure your VAT system is not only compliant but efficient, risk-averse, and audit-proof.

Whether you are a startup navigating your first VAT registration or a large group handling multiple VAT returns across Free Zones and Emirates, we tailor our approach to your operational and tax footprint, mapping your revenue flows, supplier relationships, and customer contracts into a sustainable VAT framework.

With Finjuris, you benefit from

01.

End-to-End VAT Lifecycle Support

From registration to corrections, audits, and dispute resolution.

02.

Strategic Input/Output Optimization

Maximize recoverability, eliminate leakage, and manage cash flow better.

03.

FTA-Ready Documentation

Our returns are backed by clear, reconciled audit trails and inter-emirate mappings.

04.

Real Sector Experience

Our VAT specialists have worked with clients in digital platforms, construction, SaaS, hospitality, logistics, and medical services.

05.

Full Integration with Corporate Tax & ESR

We ensure your VAT treatment aligns with your broader tax obligations and filings.

What sets us apart?

01.

Holistic VAT Strategy, Not Just Compliance

We don’t just file returns, we align your pricing, invoicing, contract terms, and operational workflows with VAT rules to reduce future exposure.

02.

FTA Audit Representation & Risk Forecasting

Our team doesn’t wait for audit notices. We run mock reconciliations and gap checks, prepare your documentation, and represent you during regulatory disputes.

03.

Free Zone & Designated Zone Expertise

From customs registration to intra-zone transfers, we understand the unique VAT nuances that apply to Designated Zones and dual operations across Free Zone/Mainland setups.

04.

Advanced Reconciliation & Filing Automation

We streamline return preparation using automation, mapping input/output VAT and accounting records for faster, error-free filing.

FAQs

Who needs to register for VAT in the UAE?

Any business with annual taxable sales or imports exceeding AED 375,000 is required to register. Businesses with a taxable supply above AED 187,500 can opt for voluntary registration. This applies to both Free Zone and mainland companies.

Am I able to claim back VAT on business expenses?

Yes—if you are registered for VAT and the expenses are linked to taxable business operations, you can typically reclaim input VAT, provided that you have kept appropriate documentation.

What distinguishes zero-rated supplies from exempt supplies?

Zero-rated: Taxed at 0% (such as exports and international transport); input VAT can be recovered
Exempt: Not subject to tax (for instance, residential rent and certain financial services); input VAT cannot be reclaimed

Can Free Zone companies be subject to VAT?

Yes. While some Free Zones are designated zones where special rules apply, not all Free Zones are exempt. If a company makes taxable supplies, VAT registration is required, and VAT must be charged or reported accordingly.

What happens if I submit incorrect VAT returns?

Incorrect submissions may result in penalties, blocked refunds, and FTA audits. However, the FTA allows for Voluntary Disclosures (VDs) to correct past mistakes and potentially reduce fines if submitted promptly.

Is VAT applicable to intercompany transactions?

Yes, if the transaction occurs between legally separate entities, even within the same group. We assess whether group VAT registration can reduce the need for intercompany VAT charges.

What is VAT grouping, and how does it impact intercompany transactions?

VAT grouping allows UAE-based businesses under common control to be treated as a single taxable person by the FTA, meaning transactions between group members won’t attract VAT. This structure can significantly simplify intra-group dealings and maximize VAT recovery, particularly in groups with diverse supply types.

How should mixed or composite supplies be treated for UAE VAT compliance?

The UAE’s VAT legislation requires careful classification of mixed or composite supplies, where a transaction combines both taxable and exempt elements (e.g., sale-and-leaseback combined with financing). Each element must be separately identified and categorized, and VAT must be apportioned or applied appropriately. These demands detailed contractual and accounting analysis based on factual circumstances.

How is VAT treated for e-commerce and online platforms?

Digital businesses supplying goods or services to UAE residents are subject to the standard 5 % VAT. Imported services and goods from non-resident suppliers trigger the reverse charge mechanism, where the UAE-registered recipient accounts for and recovers VAT under standard input/output rules

What are the VAT implications for the transfer of a business as a going concern (TOGC) in the UAE?

The transfer of a business as a going concern (TOGC) may be treated as outside the scope of VAT if specific conditions are met, such as the entire business or an independent part of it being transferred, and the buyer continuing the same kind of business. However, the UAE VAT legislation does not automatically exempt TOGCs from VAT, unlike some other jurisdictions. Proper structuring and documentation are critical to avoid unintended VAT liabilities during such transactions.

VALUE ADDED TAX (VAT)

Accurate Reporting. Business Optimization. Safe Transactions.