VAT is collected by businesses on behalf of the government and remitted quarterly (or monthly for large taxpayers). Businesses with taxable supplies exceeding AED 375,000 per year must register for VAT; voluntary registration is available from AED 187,500. The UAE VAT rate of 5% is among the lowest in the world, but the compliance obligations are real — quarterly returns, input VAT tracking, credit notes, tax invoices, and FTA record-keeping requirements. As of 2025, the FTA has significantly increased audit activity, particularly targeting businesses with consistently high input VAT claims.
Key VAT thresholds: Mandatory registration: AED 375,000 annual taxable supplies. Voluntary registration: AED 187,500. De-registration: below AED 187,500 per year.
See also: VAT Return, Output VAT, Input VAT, Tax Registration Number (TRN)
