Value Added Tax (VAT) has applied in the UAE since 2018. If your business is registered, you need to file a VAT return with the Federal Tax Authority (FTA) every tax period, usually quarterly. The return itself is filed online, but the work is in getting the figures right. Here is a simple way to do that.
The basics
- Standard rate: 5% on most goods and services.
- Zero-rated (0%): certain exports, international transport, some education and healthcare, and some other supplies.
- Exempt: some financial services, bare land and certain residential property. You charge no VAT, but you also can't usually reclaim related input VAT.
- Registration: mandatory when taxable supplies exceed AED 375,000 in 12 months, and voluntary from AED 187,500.
Output VAT and input VAT
Output VAT is the VAT you charge customers on your sales. Input VAT is the VAT you pay suppliers on business purchases. Your return shows the difference: if output is higher, you pay the FTA; if input is higher, you may have a refund or carry it forward.
Preparing your figures step by step
- List every sales invoice issued in the period with net amount, VAT and emirate. A Sales Invoice Register & VAT Summary keeps this tidy.
- List every purchase invoice with the supplier's TRN and the VAT charged. The Purchase VAT (Input Tax) Register flags missing TRNs and maths errors.
- Separate standard-rated, zero-rated and exempt sales, because they go in different boxes.
- Check blocked input VAT, such as most entertainment and certain motor vehicles, which you can't reclaim.
- Calculate net VAT = output VAT − recoverable input VAT.
- Reconcile with your accounts before you file, then keep the workings with your records.
Common mistakes
- Claiming input VAT on invoices without the supplier's TRN.
- Putting sales in the wrong period. The tax point is usually the invoice or delivery date, whichever is earlier.
- Forgetting credit notes, which reduce output VAT.
- Missing the filing deadline, usually 28 days after the period ends, which attracts penalties.
Do it in minutes: download the VAT Return Calculator (instant download, works in Excel and Google Sheets). Need the related files too? Browse UAE business templates or get 25 business templates for AED 29 in our value packs.
This guide is general information, not legal, tax or financial advice. Rules change, so check the latest official guidance or ask a qualified adviser for your situation.