Taxes
UAE — Tax: VAT
The UAE applies a standard VAT rate of 5%, one of the lowest in the world, introduced in January 2018. Businesses with annual taxable turnover exceeding AED 375,000 must register for VAT; those between AED 187,500 and 375,000 may register voluntarily. Certain sectors (e.g. specific healthcare, education, and residential real estate transactions, and exports) are zero-rated or exempt. VAT is administered by the Federal Tax Authority, with periodic returns typically filed quarterly.
Key facts
- Standard VAT rate: 5%, among the lowest globally, in effect since January 2018.
- Mandatory VAT registration threshold: AED 375,000 annual taxable turnover; voluntary registration from AED 187,500.
- Certain healthcare, education, residential real estate, and export transactions are zero-rated or exempt.
Costs
- Standard VAT rate: 5%
Common mistakes
- Not registering for VAT once turnover crosses the mandatory AED 375,000 threshold.