Value Added Tax

UAE VAT, mapped to how your business actually trades

VAT has applied in the UAE since 2018 at a standard rate of 5%, but the rules your business has to follow depend on how it trades. Domestic supplies, imports, exports and Designated Zone movements each carry their own treatment, and Federal Decree-Law No. 16 of 2025 changed several of them from 1 January 2026, including reverse charge invoicing and the time limit for requesting refunds of excess recoverable VAT.

RSM UAE's VAT team helps you work out which rules apply to your transactions, keeps your registration, returns and recovery on track, and gives you a self-assessment checklist to test your own readiness ahead of your next return.

Independent Firms
0+
Countries
0
Standard Rate
5%
Local Presence
UAE

Note: 5% is the standard VAT rate under Federal Decree-Law No. 8 of 2017 on Value Added Tax; certain supplies are zero-rated or exempt. It is a regulatory figure.

Regulatory Frames

Two VAT Frames for UAE Businesses

Most VAT risk sits in one of two places. Frame 1 covers the day-to-day obligations of every VAT-registered business: registration, invoicing, returns and input tax. Frame 2 covers cross-border and zone-based trade, where reverse charge, zero-rating and Designated Zone rules decide how much VAT is due. Many businesses sit in both; the services below are built around what each one requires.

Consideration Domestic VAT Compliance

Law

Federal Decree-Law No. 8 of 2017 on Value Added Tax, as amended by Federal Decree-Law No. 16 of 2025 (effective 1 January 2026)

Applies to

UAE businesses that are registered for VAT, or are required to register on meeting the thresholds set by the law: mandatory registration when taxable supplies and imports exceed AED 375,000 over the previous 12 months, or are expected to within the next 30 days; voluntary registration where taxable supplies and imports, or taxable expenses, exceed AED 187,500 over 12 months · non-resident businesses making taxable supplies in the UAE where the recipient does not account for the VAT

Requires

FTA registration, 5% VAT on taxable supplies (0% or exempt where the law allows), valid tax invoices and credit notes, a VAT return for every tax period, and records the FTA can inspect

Key dates

Return and payment due by the 28th day after each tax period ends (usually quarterly or monthly) · excess recoverable VAT must be claimed within 5 years (from 1 January 2026, subject to transitional provisions)

Penalty

From 14 April 2026 (Cabinet Decision No. 129 of 2025): late payment at 14% a year, accrued monthly · late return filing AED 1,000 (AED 2,000 if repeated within 24 months) · incorrect return AED 500 · AED 2,500 per tax invoice or credit note not issued on time

Our services for this frame

■     Detailed VAT impact assessment to analyse the correct VAT treatment and rate for each type of transaction, and the next steps for compliance

■     VAT registration and tax group registration

■     VAT return review, and assistance with filing if required

■     Assistance with VAT refund applications

■     VAT health checks and voluntary disclosures

■     VAT deregistration and assistance with filing the final VAT return

■     Assistance with seeking a private clarification from the FTA

■     FTA audit support and reconsideration requests

Frame 2Cross-Border Trade, Imports & Designated Zones

Law

Federal Decree-Law No. 8 of 2017 and its Executive Regulation, including the rules on imports, exports and Designated Zones

Applies to

Businesses importing or exporting goods and services, non-resident suppliers making taxable supplies in the UAE, and businesses operating in Designated Zones

Requires

Reverse charge accounting on imported goods and services (no self-invoice needed from 1 January 2026) · evidence to support zero-rated exports · correct treatment of goods moving in and out of Designated Zones · checks that supplies are not linked to tax evasion before recovering input tax

Key dates

Reverse charge declared in the VAT return for the period of import · export evidence kept on file to support zero-rating

Consequence

Missing reverse charge entries or export evidence can lead to under-declared VAT, lost zero-rating and penalties; input tax linked to a supply the business knew or should have known involved tax evasion can be disallowed

Our services for this frame

■     Reverse charge mapping for imported goods and services

■     Export zero-rating and evidence reviews

■     Designated Zone VAT structuring and movement reviews

■     VAT registration for non-resident suppliers

■     VAT impact reviews for cross-border contracts and supply chains

■     E-invoicing readiness for VAT invoices under the UAE mandate

Compliance Checklist

Build Your UAE VAT Compliance Assessment

Start with the checklist for the frame that applies to your business. Anything you can't tick confidently is where an assessment should start.

Frame 1 — Domestic VAT Compliance

Federal Decree-Law No. 8 of 2017, as amended

☐    Have you registered for VAT with the FTA, and is your registration still correct for your current activities?

☐    Do you monitor your taxable supplies and imports against the AED 375,000 mandatory registration threshold?

☐    Do you file and pay each VAT return by the 28th day after the tax period ends?

☐    Are your tax invoices and credit notes issued on time and in the required format?

☐    Have you checked for any excess input tax that must be claimed before the new 5-year limit applies?

☐    Have you reviewed your exposure under the penalty rules in force from 14 April 2026?

☐    Are you preparing your systems for the UAE e-invoicing mandate?

Frame 2 — Cross-Border & Designated Zones

Imports, exports and Designated Zone rules

☐    Do you account for reverse charge VAT on all imported goods and services?

☐    Have your systems been updated now that self-invoicing for imports is no longer required?

☐    Do you hold the evidence needed to support every zero-rated export?

☐    Is the VAT treatment of goods moving to and from Designated Zones mapped correctly?

☐    If you are a non-resident making supplies in the UAE, have you confirmed whether you must register?

☐    Do you check suppliers and transactions before recovering input tax, as the amended law now requires?

☐    Have you reviewed cross-border contracts for VAT clauses and pricing?

How to Use This Checklist
Any item you can't answer with a confident "yes" is a gap worth closing before your next VAT return or FTA review. Treat the unchecked items as a punch list, then get in touch and we'll turn it into a scoped VAT health check.
Why RSM

Why Choose RSM UAE?

RSM UAE combines regulatory knowledge with practical experience helping UAE businesses file accurate VAT returns and adapt to the 2026 changes. Expand each reason below.

Hands-on VAT compliance experience. Why it matters —
We handle registration, returns and FTA correspondence for businesses of every size, so deadlines and invoicing rules are met as part of your normal finance cycle.
Up to date with the 2026 VAT Law changes. Why it matters —
Reverse charge invoicing, the 5-year input tax limit and the new penalty framework all changed in 2026; we review how each one affects your processes.
Cross-border and Designated Zone expertise. Why it matters —
Imports, exports and zone movements are where VAT errors most often build up; we map each flow so the right treatment is applied every time.
Connected to e-invoicing and corporate tax. Why it matters —
Our VAT, e-invoicing and corporate tax teams work together, so changes to invoicing systems and tax positions stay consistent across all three.
Not sure where you stand? Start with the checklist —
Use our self-assessment checklist for both VAT frames to see where the gaps are, then jump to the checklist → or go straight to contact us for a VAT health check.
Get in Touch

Let's make sure your VAT position is right before your next return.

Reach our Tax team directly, or send us a message using the enquiry form below.

Phone

+971 4 554 7423

Email

tax-inquiry@rsm.ae

Location

United Arab Emirates