VAT Consultancy
Introduction to VAT in the UAE
Value Added Tax (VAT) is an indirect tax introduced in the United Arab Emirates on January 1, 2018 at a standard rate of 5%. It applies to most goods and services and is collected at each stage of the supply chain. While VAT is ultimately paid by the end consumer, businesses are responsible for collecting and remitting it to the Federal Tax Authority (FTA).
The introduction of VAT is part of the UAE’s efforts to diversify its economy and reduce reliance on oil revenues. For businesses, this means new compliance requirements, including registration, invoicing, record-keeping, and timely filing of returns.
At FSH Financial Consultants, we provide end-to-end support for UAE VAT and Corporate Tax, helping businesses stay compliant, efficient, and penalty-free. Whether you’re a startup, SME, or established entity, our personalized services ensure your tax obligations are handled with accuracy and care.
Understanding VAT in the UAE
Your Guide to Value Added Tax (VAT) Compliance
Value Added Tax (VAT) was introduced in the UAE on January 1, 2018 at a standard rate of 5%. As a consumption-based tax, VAT is levied on most goods and services at each stage of the supply chain. The ultimate burden of the tax falls on the end consumer, while businesses act as intermediaries responsible for collecting and remitting VAT to the Federal Tax Authority (FTA).
Who Should Register for VAT?
Businesses must register for VAT if:
Mandatory Registration: Annual taxable turnover exceeds AED 375,000
Voluntary Registration: Annual turnover or expenses exceed AED 187,500
Failure to register when required can result in significant administrative penalties.
Key VAT Concepts
Taxable Supplies: Goods or services subject to the 5% standard rate or 0% rate
Exempt Supplies: No VAT applied, and input VAT cannot be recovered (e.g., certain financial services, residential property leases)
Zero-Rated Supplies: Taxed at 0%, but input VAT can be recovered (e.g., exports, international transportation, certain healthcare and education services)
VAT Responsibilities for Businesses
Registered businesses must:
Charge VAT on taxable supplies
Issue valid VAT invoices
Maintain accurate financial records
File VAT returns (usually quarterly)
Pay VAT due to the FTA
Maintain compliance with VAT laws and regulations
Common Challenges with VAT
Understanding treatment for complex transactions
Input VAT recovery eligibility
Reverse charge mechanism for imports
Dealing with corrections and voluntary disclosures
Preparing for FTA audits
How FSH Financial Consultants Can Help
At FSH Financial Consultants, we simplify VAT compliance for businesses of all sizes. Our services are tailored to your needs, whether you’re registering for the first time or need ongoing support.
Our VAT solutions include:
VAT Registration & Advisory
Return Filing & Record Maintenance
VAT Health Checks & Compliance Reviews
Voluntary Disclosures & Penalty Mitigation
Representation during FTA audits
Training and support for your finance team