Short answer
VAT applies to most goods and services in the UAE at a standard rate of 5%, per FTA publications. Businesses must register when taxable supplies exceed the mandatory threshold published by the FTA (AED 375,000), and may register voluntarily above a lower threshold (AED 187,500).
The basics
Tax rules, rates and thresholds can change. Figures shown are taken from official FTA publications at the review date — always confirm current rules on tax.gov.ae or with a registered tax agent.
| Item | Per FTA publications |
|---|---|
| Standard rate | 5% |
| Mandatory registration | Taxable supplies/imports above AED 375,000 |
| Voluntary registration | Above AED 187,500 |
Once registered
- You receive a
- Issue compliant tax invoices
- File periodic VAT returns
- Keep records for the required period
Free zones and VAT
Most free zones are treated like the mainland for VAT. Certain 'designated zones' have special treatment for specific goods transactions. Confirm your position with a tax agent.
Key takeaways
- Monitor your turnover against the threshold.
- Registration brings invoicing and filing duties.
Related authorities
Related guides
IBS services
Related glossary terms
Frequently asked questions
Is a free zone company exempt from VAT?
Not generally. Only specific transactions in designated zones receive special treatment.
Last reviewed: 25 September 2026
General educational content — not legal or tax advice. IBS is not affiliated with any government entity. Always confirm current requirements with the official authority.