Frequently Asked Questions

1.Bare land. 2.Transport of local passengers. 3.Financial services such as life insurance that aren’t provided for a discount, or any similar kind of consideration. 4.Residential buildings except for those buildings which are specifically zero-rated.

No. Businesses supplying exempted goods or services are not allowed to claim input tax paid on purchases. The input tax paid would be considered as a cost to the company.

No, Tax invoices are issued by registered taxable person as defined by FTA. There are two kinds of invoices: simplified Tax Invoices specific to supermarkets and detailed tax invoices for retail industries.

Yes, It is possible to claim back input tax paid on imported goods through Reverse Charge Mechanism.

Non - Taxable supplies will not qualify for deductibility of VAT. Duty paid at the time of import cannot be claimed for payment of VAT. Input tax cannot be deducted if it is incurred for certain expenses, such as entertainment.

Yes, UAE nationals who do not have VAT registration can still claim VAT under certain circumstances. There are various VAT refund schemes benefitting and supporting the UAE Nationals, even for those who are unregistered. This scheme is available to those constructing new residences in UAE solely for the use by the owner and family.

A business must register for VAT if their taxable supplies and imports exceed the mandatory registration threshold of AED 375,000. Furthermore, a business may choose to register for VAT voluntarily if their supplies and imports are less than the mandatory registration threshold, but exceed the voluntary registration threshold of AED 187,500.

Taxpayers must file VAT returns with the FTA on a regular basis (quarterly or for a shorter period, should the FTA decide so) within 28 days from the end of the tax period in accordance with the procedures specified in the VAT legislation. The Tax returns shall be filed online using E-Services.

Any taxable person must retain VAT invoices issued and received for a minimum of 5 years.

The VAT treatment of real estate will depend on whether it is a commercial or residential property. Supplies (including sales or leases) of commercial properties will be taxable at the standard VAT rate (i.e 5%). On the other hand, supplies of residential properties will generally be exempt from VAT.

Businesses that satisfy certain requirements covered under the Legislation (such as being resident in the UAE and being related/associated parties) will be able to register as a VAT group. For some businesses, VAT grouping will be a useful tool that would simplify accounting for VAT.

Penalties will be imposed for non-compliance. Examples of actions and omissions that may give raise to penalties include: A person failing to register when required to do so; A person failing to submit a tax return or make a payment within the required period; A person failing to keep the records required under the issued tax legislation; Tax evasion offences where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.

A supplier registered or required to be registered for VAT must issue a valid VAT invoice for the supply. To be considered as a valid VAT invoice, the document must follow a specific format as mentioned in the legislation. In certain situations the supplier may be able to issue a simplified VAT invoice. The conditions for the VAT invoice and the simplified VAT invoice are mentioned legislation.

Yes, if your zero-rated supplies exceed AED 375,000, you will be required to register for VAT, however you can also claim exception from VAT registration.

Corporate Tax, also called “Corporate Income Tax” or “Business Profits Tax” is a form of direct tax levied on the net income or profit of corporations and other businesses.

The UAE CT regime will become effective for financial years starting on or after 1 June 2023

Yes, it is applicable to businesses in each Emirate.

Federal Tax Authority (FTA). The Ministry of Finance will remain the ‘competent authority’ for purposes of bilateral/multilateral agreements and the international exchange of information for tax purposes

UAE CT will be applicable across all Emirates and to all business and commercial activities, except for the extraction of natural resources, which will remain subject to Emirate level taxation.

All activities undertaken by a legal entity will be deemed “business activities” and hence be within the scope of UAE CT

Yes, Individuals with a commercial license and generating income through their business is covered by UAE CT

After making the necessary adjustments as prescribed in the UAE CT law, the UAE CT rate will be applied to the net profits as reported in financial statements that are complied with internationally acceptable accounting standards.

0% for taxable income up to AED 375,000; 9% for taxable income above AED 375,000; and a different tax rate for large multinationals that meet specific criteria

UAE CT will not apply on an individual’s salary and other employment income (whether received from the public or private sector)