VAT was introduced in the UAE with effect from 1 January 2018. The standard rate of VAT is 5%. In addition, a zero rate and exemptions apply to certain types of supply.

With more than 55 years of experience in the UAE market, BDO in the UAE supports organisations in navigating this regulatory landscape, helping them maintain compliance while aligning tax obligations with broader financial and operational objectives.

Scope of VAT

VAT applies to every taxable supply of goods and services made by a taxable person, including the import of relevant goods and services. Taxable supplies may be subject to the standard rate of 5% or may be zero-rated, subject to specific conditions. Certain supplies are exempt from VAT.

VAT registration is generally required where taxable supplies exceed the mandatory threshold of AED 375,000 in the previous 12-month period or are expected to exceed that threshold in the next 30 days. In certain cases, VAT registration may still be required even if the threshold has not been exceeded.

UAE VAT law also allows two or more legal entities to register as a single taxable person by forming a VAT group, provided the relevant conditions are met. A VAT group benefits from a single VAT Tax Registration Number (TRN), a single VAT return, and a single VAT payment process for all entities within the group.

Zero-rated supplies include exports of goods, exports of services, international transport of passengers and goods, investment precious metals, certain supplies of residential property, crude oil and natural gas, and certain healthcare services, subject to specified conditions and supported by appropriate documentary evidence.

Exempt supplies include certain financial services, certain supplies of residential property, bare land, and local passenger transport, subject to specified conditions and supported by appropriate documentary evidence.

How BDO in the UAE can help

BDO in the UAE provides a comprehensive range of VAT services to help organisations manage compliance, assess risk, and respond effectively to regulatory developments.

• Assessment of e-invoicing readiness
• Evaluation of the obligation to obtain VAT registration
• VAT impact assessments across business transactions
• VAT registration and de-registration support
• VAT compliance support
• VAT refund support
• VAT advisory services
• VAT training
• VAT manuals and policies
• VAT health-check reviews
• Assistance with obtaining private clarifications from the Federal Tax Authority
• Assistance with reconsideration and waiver applications to the Federal Tax Authority
• Audit-ready support before a Federal Tax Authority audit
• Review of Public-Private Partnership (PPP) financial models from a tax perspective
• Federal Tax Authority audit support
• Tax agency services to represent businesses before the Federal Tax Authority in relation to audits, assessments, objections, and appeals

Why businesses choose BDO in the UAE

• Registered FTA Tax Agents – direct representation before the Federal Tax Authority
• Ministry of Finance pre-approved e-invoicing service provider
• Long-established presence in the UAE – extensive VAT expertise since 2018
• End-to-end VAT support – compliance, audits, disputes, and strategic structuring
• Deep sector expertise – practical solutions aligned with business operations
• Future-ready VAT advisory – aligned with eInvoicing and digital reporting developments
• Commercially sound advice – risk-managed and aligned with regulatory expectations

Supporting practical VAT compliance

Our VAT specialists take the time to understand each client’s business, allowing them to identify opportunities, anticipate challenges, and respond with practical and effective solutions. By developing a clear understanding of your operations, we can help improve VAT efficiency while supporting ongoing compliance.