UAE Value Added Taxchapter by chapter

Article 15 (Decree-Law); Article 16 (Cabinet Decision 52/2017)

Registration exception for wholly zero-rated supplies. Article 15 of Federal Decree-Law No. 8/2017, with Article 16 of Cabinet Decision No. 52/2017, allows a Person whose supplies are wholly zero-rated to apply to the Federal Tax Authority for an exception from Tax Registration, recognising that such a Person would have no Output Tax to collect and would be in a permanent net-refund position. Where circumstances later change such that the exception basis no longer applies, the Person must notify the Authority within 10 business days, at which point the standard registration obligation is triggered.

Article 16 (Decree-Law)

Government Entity Tax Registration. Article 16 of Federal Decree-Law No. 8/2017 requires a Government Entity determined by Cabinet Decision to apply for Tax Registration, regardless of whether it would otherwise meet the Mandatory or Voluntary Registration Threshold under Articles 13 or 17. Once registered under this Article, such a Government Entity may not be deregistered except by a further Cabinet Decision, reflecting the different, decision-driven basis on which Cabinet-listed Government Entities enter and remain within the VAT registration system compared with ordinary Taxable Persons.

Article 17 (Decree-Law); Article 8 (Cabinet Decision 52/2017)

Voluntary Tax Registration threshold. Article 17 of Federal Decree-Law No. 8/2017, with Article 8 of Cabinet Decision No. 52/2017, allows a Person not otherwise obligated to register to voluntarily apply for Tax Registration once its taxable supplies or taxable expenses exceed, or are anticipated within 30 days to exceed, the AED 187,500 Voluntary Registration Threshold — set at half the AED 375,000 Mandatory Registration Threshold. Voluntary registration is conditional on the Person demonstrating an intention to make taxable supplies or incur taxable expenses, and evidencing genuine Business activity in the State, rather than being available purely at the Person's discretion.

Article 18 (Decree-Law)

Non-Resident Person threshold exclusion. Article 18 of Federal Decree-Law No. 8/2017 provides that a Non-Resident Person must exclude the value of Goods or Services it imports into the State from its own registration-threshold calculation, where responsibility for accounting for the Tax on that import instead falls on the Importer under Article 48(1) of the Decree-Law. This prevents a Non-Resident supplier's registration threshold from being inflated by import values for which a UAE-based Importer, rather than the Non-Resident itself, bears the reverse-charge Tax accounting obligation.

Article 21-23 (Decree-Law); Article 14, 14 bis (Cabinet Decision 52/2017)

Tax Deregistration. Articles 21-23 of Federal Decree-Law No. 8/2017, with Articles 14 and 14 bis of Cabinet Decision No. 52/2017, require a Registrant to apply for Tax deregistration within 20 business days of ceasing to make taxable supplies, or of its taxable supplies and expenses over the preceding 12 months falling below the AED 187,500 threshold — subject to a 12-month minimum registration lock-in for voluntary registrants. Deregistration requires settling all Tax and Administrative Penalties due and filing a final Tax Return, and the Federal Tax Authority also retains power to deregister a Person independently to protect the integrity of the Tax system.

Articles 13, 19-20 (Decree-Law); Articles 6-7 (Cabinet Decision 52/2017)

Mandatory Tax Registration threshold. Articles 13 and 19-20 of Federal Decree-Law No. 8/2017, with Articles 6-7 of Cabinet Decision No. 52/2017, require a Person to register for VAT within 30 days of becoming liable, where taxable supplies — together with Concerned Goods and Services received, business-transfer supplies, and aggregated Related Party supplies — exceeded the AED 375,000 Mandatory Registration Threshold over the preceding 12 months, or are anticipated to exceed it within the next 30 days. Capital Asset disposals are excluded from the threshold calculation, preventing a one-off asset sale from artificially triggering a registration obligation.

Article 13 (Cabinet Decision 52/2017)

Artificial segregation and threshold aggregation. Article 13 of Cabinet Decision No. 52/2017 provides that where Related Parties artificially segregate their Business without registering as a Tax Group, the Federal Tax Authority may aggregate their Taxable Supplies for the purpose of testing against the Mandatory Registration Threshold, treating the separated entities as if they were a single Person for threshold purposes. Where the aggregated total exceeds AED 375,000, the Related Parties must register accordingly, closing off the option of splitting a single Business into multiple sub-threshold entities purely to avoid VAT registration.

Article 14 (Decree-Law); Articles 9-13 (Cabinet Decision 52/2017)

Tax Group registration. Article 14 of Federal Decree-Law No. 8/2017, with Articles 9-13 of Cabinet Decision No. 52/2017, allows two or more Related Party Persons with a Place of Establishment or Fixed Establishment in the State to register as a single Tax Group, applying through a representative member, with the Federal Tax Authority deciding the application within 20 business days. The representative member must notify the Authority within 20 business days if a member becomes ineligible, and apply for membership changes or Tax Group deregistration as needed; all members remain jointly and severally liable for the representative member's Payable Tax.

Article 64 (Decree-Law)

Bad debt relief. Article 64 of Federal Decree-Law No. 8/2017 allows a supplier to reduce its Output Tax where a bad debt is written off, provided more than six months have passed since the date of supply, the Due Tax on that supply has already been paid, and the Recipient has been notified of the write-off. The corresponding Recipient must, in turn, reduce any Input Tax it previously recovered on the same supply by the equivalent amount, ensuring the Output Tax reduction claimed by the supplier is mirrored by an Input Tax reduction on the recipient's side rather than creating a net Tax loss to the Authority.

Articles 61-63, 70 (Decree-Law); Article 60 (Cabinet Decision 52/2017)

Tax Credit Notes. Articles 61-63 and 70 of Federal Decree-Law No. 8/2017, with Article 60 of Cabinet Decision No. 52/2017, require a Registrant to issue a Tax Credit Note within 14 days of an event that reduces Output Tax — including cancellation of a supply, a change in Tax treatment, a change in Consideration, a return of goods, or correction of an error — containing the same prescribed particulars as a Tax Invoice. The Tax stated on the Credit Note reduces the issuer's Output Tax and the recipient's previously recovered Input Tax, in the Tax Period the Credit Note is received.

Articles 65-67, 69 (Decree-Law); Articles 59, 61 (Cabinet Decision 52/2017)

Tax Invoice requirements. Articles 65-67 and 69 of Federal Decree-Law No. 8/2017, with Articles 59 and 61 of Cabinet Decision No. 52/2017, require a Registrant to issue an original Tax Invoice — full-form or simplified, depending on the transaction — within 14 days of the date of supply, containing prescribed particulars including the Tax Registration Number, a sequential invoice number, the supply date, description, unit price, Tax rate and amount, gross amount, and a reverse-charge statement where relevant. Non-AED amounts are converted using the Central Bank exchange rate on the date of supply, and Electronic Invoices must be issued via the Electronic Invoicing System where mandated.

Article 9 (Decree-Law); Article 9 (Cabinet Decision 52/2017)

Agent responsibility for import Tax. Article 9 of Federal Decree-Law No. 8/2017, with Article 9 of Cabinet Decision No. 52/2017, provides that where a Tax-registered agent imports goods on behalf of an unregistered principal, the agent — not the principal — is responsible for paying and reporting the import Tax through its own Tax Return, and must issue the principal a statement containing prescribed particulars, which is treated as a Tax Invoice for the principal's purposes. The agent may not recover the Tax it paid on the principal's behalf as its own Input Tax, since the underlying supply relates to the principal's business, not the agent's.

Article 37; Directive on Tax Transactions 3/2026

Digital currency conversion methodology. Directive on Tax Transactions No. 3 of 2026 prescribes how a Taxable Person supplying a digital currency, or receiving Consideration in digital currency for a supply of Goods or Services, must convert that value into AED for VAT Return disclosure: select 3 exchange platforms from the FTA's published list of centralised public digital currency exchange platforms and use the same 3 platforms consistently for all such transactions within the calendar year; calculate the numerical average of the exchange rates published by those 3 platforms at the date and time of supply (or of Consideration receipt, whichever is relevant); and use that average to convert the digital currency value into AED. The Taxable Person must retain records evidencing the exchange rates obtained from each of the 3 platforms alongside its other supply-related recordkeeping obligations. The Authority separately publishes the approved platform list and will issue guidance for cases where a digital currency's rate is not available on 3 listed platforms.

Article 37; Directive on Tax Transactions 5/2026

Deemed Supply of Services valuation methodology. Directive on Tax Transactions No. 5 of 2026 prescribes, for Article 37 of the VAT Law, how a Taxable Person must value a Deemed Supply of Services based on the total costs on which Input Tax was incurred: (a) determine the open market value of the Services (or comparable Services if that cannot be determined); (b) back out the profit element by dividing the open market value by (1 + net profit margin) -- using the Taxable Person's own net profit margin from its preceding financial year's financial statements, or the prevailing sector-average margin if the Taxable Person's own margin cannot be determined -- to estimate total cost; (c) calculate the percentage of costs on which Input Tax was incurred against total costs incurred in the preceding financial year; and (d) apply that percentage to the estimated total cost to arrive at the value of the Deemed Supply.

Article 48 (Decree-Law); Articles 47-50 (Cabinet Decision 52/2017)

Reverse-charge mechanism. Article 48 of Federal Decree-Law No. 8/2017, with Articles 47-50 of Cabinet Decision No. 52/2017, requires the recipient — rather than the supplier — to account for VAT under the reverse-charge mechanism on imports of Concerned Goods and Concerned Services, and on qualifying oil, gas and Pure Hydrocarbon supplies between Registrants where written declarations are exchanged. The Due Tax is settled through the recipient's own Tax Return for the relevant Tax Period, supported by retained supplier invoices, Customs statements and written declarations; an unregistered importer must instead settle the Tax through the Customs-linked payment mechanism before the Goods are released.

Articles 34-42 (Decree-Law); Articles 25-28 (Cabinet Decision 52/2017)

Value of Supply rules. Articles 34-42 of Federal Decree-Law No. 8/2017, with Articles 25-28 of Cabinet Decision No. 52/2017, set the rules for determining the value of a supply for Tax purposes, covering monetary and non-monetary Consideration, a market-value rule for Related Party supplies, a cost-basis rule for Deemed Supplies, treatment of discounts, subsidies, vouchers and postage stamps, and valuation on re-import following temporary transfer. Tax-inclusive pricing applies by default, except in permitted Tax-exclusive-pricing scenarios such as exports, supplies to Registrant customers, and reverse-charge supplies under Article 48(3).

Article 30(7), (9) (Cabinet Decision 52/2017)

Extension of the export evidence window. Article 30(7) and (9) of Cabinet Decision No. 52/2017 allows a supplier who cannot obtain the required export evidence within the standard 90-day window — because of circumstances beyond its control or the nature of the supply itself — to apply in writing to the Federal Tax Authority for an extension of that period. Without a granted extension, failure to produce the evidence within 90 days results in the zero rate being disallowed and the supply being reassessed and taxed at the standard rate, making the extension application a time-sensitive safeguard against an unintended standard-rate Tax liability.

Articles 44-45 (Decree-Law); Articles 30-41 (Cabinet Decision 52/2017)

Zero-Rating categories. Articles 44-45 of Federal Decree-Law No. 8/2017, with Articles 30-41 of Cabinet Decision No. 52/2017, confine the zero VAT rate to defined categories of supply: direct and indirect exports of goods, international transport and related services, qualifying air, sea and land means of transport and related goods and services, investment precious metals, the first supply of new or converted residential and Charity buildings within applicable time limits, crude oil and natural gas, and qualifying education and healthcare services and related goods. Each category carries its own specific evidentiary requirement, such as export customs, commercial and shipping evidence obtained within 90 days of supply.

Article 46 (Decree-Law); Articles 42-45 (Cabinet Decision 52/2017)

Exempt Supplies. Article 46 of Federal Decree-Law No. 8/2017, with Articles 42-45 of Cabinet Decision No. 52/2017, classifies defined categories of financial services, residential buildings (other than a zero-rated first supply), bare land, and local passenger transport as Exempt Supplies — meaning no Output Tax is charged, and the associated Input Tax is generally not recoverable, except where a specific financial-services place-of-supply or zero-rating override applies. The rules distinguish exempt financial services, provided without an explicit fee, from taxable financial services charged by an explicit fee or commission, which fall outside the exemption.

Article 43 (Decree-Law); Article 29 (Cabinet Decision 52/2017)

Profit Margin Scheme. Article 43 of Federal Decree-Law No. 8/2017, with Article 29 of Cabinet Decision No. 52/2017, allows a Registrant to elect to charge VAT on the profit margin, rather than the full sale price, for qualifying second-hand goods, antiques and collectors' items purchased from non-Registrants or other margin-scheme sellers. Electing the scheme requires notifying the Federal Tax Authority, maintaining a stock book and purchase-invoice record for each item, and issuing Tax Invoices stating that Tax was charged with reference to the profit margin, without separately disclosing the actual Tax amount charged.

Articles 50-52 (Decree-Law); Article 51 (Cabinet Decision 52/2017)

Designated Zones. Articles 50-52 of Federal Decree-Law No. 8/2017, with Article 51 of Cabinet Decision No. 52/2017, treat a Designated Zone — a fenced area meeting security and customs-control conditions — as outside the State for certain VAT purposes, with specific rules governing transfers of goods between Designated Zones, consumption within a Designated Zone, and the place-of-supply treatment of goods, services, water and energy supplied in or from a Designated Zone. A Person relying on out-of-scope or zero-rated Designated Zone treatment must retain the commercial, official and customs evidence needed to support that treatment.

Article 56 (Decree-Law); Article 55 (Cabinet Decision 52/2017)

Input Tax apportionment and annual wash-up. Article 56 of Federal Decree-Law No. 8/2017, with Article 55 of Cabinet Decision No. 52/2017, requires a Registrant whose Input Tax relates partly to recoverable and partly to non-recoverable supplies to apply a standard apportionment percentage each Tax Period, followed by an annual wash-up calculation and adjustment in the first Tax Period of the following Tax year — or immediately, if the annual difference exceeds AED 250,000. A Registrant may instead apply to the Federal Tax Authority to use an alternative apportionment mechanism, or a fixed prior-year recovery percentage, in place of the standard method.

Article 60 (Decree-Law); Articles 57-58 (Cabinet Decision 52/2017)

Capital Assets Scheme. Article 60 of Federal Decree-Law No. 8/2017, with Articles 57-58 of Cabinet Decision No. 52/2017, applies to Capital Assets — single items costing AED 5,000,000 or more excluding Tax, with a five-year useful life (ten years for buildings). A Registrant must maintain a Capital Asset register recording the Year-1 Input Tax and recovery percentage, monitor actual use of the asset annually, adjust the Input Tax recovered under the Scheme where the recovery percentage changes over the asset's useful life, and retain the related records for at least ten years, or longer if the Federal Tax Authority extends the period.

Articles 54-59 (Decree-Law); Articles 52-54, 56 (Cabinet Decision 52/2017)

Input Tax recovery conditions. Articles 54-59 of Federal Decree-Law No. 8/2017, with Articles 52-54 and 56 of Cabinet Decision No. 52/2017, allow a Registrant to recover Input Tax only where it relates to Taxable Supplies (or specified out-of-State or exempt-equivalent supplies) and the recovery conditions are met — a valid Tax Invoice or import documentation retained, Consideration paid or intended to be paid within six months, and an Electronic Invoice retained where mandated. Input Tax on disallowed categories such as entertainment, personal-use motor vehicles, and employee-benefit goods and services cannot be recovered, and previously recovered or non-recovered Input Tax must be adjusted where the intended use of the Goods or Services changes within five years of the Date of Supply.

Article 63 (Cabinet Decision 52/2017)

Legal Representative filing during incapacitation. Article 63 of Cabinet Decision No. 52/2017 provides that where a Registrant becomes incapacitated — through death, liquidation, receivership, bankruptcy or other incapacity — its Legal Representative closes the Registrant's then-current Tax Period and takes over responsibility for filing and settling the Tax Return for that and subsequent Tax Periods, standing in the Registrant's place for the duration of the incapacitation. This mirrors the general Legal Representative framework in the Tax Procedures Law, applied specifically to the mechanics of VAT Tax Period filing continuity.

Articles 71-73 (Decree-Law); Articles 62, 64 (Cabinet Decision 52/2017)

VAT Tax Return and payment. Articles 71-73 of Federal Decree-Law No. 8/2017, with Articles 62 and 64 of Cabinet Decision No. 52/2017, require a Registrant to submit a Tax Return declaring all supplies made and received, Output Tax, zero-rated and exempt supply values, reverse-charge supplies, Recoverable Input Tax, and the resulting Payable or excess Tax, and to settle any Payable Tax no later than the 28th day following the end of each Tax Period — standard quarterly, though the Authority may assign a shorter or longer period. A final Tax Return is additionally required on deregistration, covering the period up to the deregistration date.

Article 74 (Decree-Law); Article 65 (Cabinet Decision 52/2017)

Recovery of excess Tax. Article 74 of Federal Decree-Law No. 8/2017, with Article 65 of Cabinet Decision No. 52/2017, entitles a Person whose Recoverable Tax exceeds its Payable Tax (or who has paid Tax in excess of what was Payable) to apply to the Federal Tax Authority to recover the excess, subject to the Authority first offsetting the excess against any other liabilities or Administrative Penalties the Person owes. Where no recovery request is made, the excess instead carries forward and can be applied against Payable Tax in future Tax Periods for up to five years from the end of the Tax Period in which it arose, after which the right to claim it lapses.

Article 75 (Decree-Law); Article 66 (Cabinet Decision 52/2017)

New residence VAT refund scheme. Article 75 of Federal Decree-Law No. 8/2017, with Article 66 of Cabinet Decision No. 52/2017, entitles a UAE national natural person to claim a refund of the VAT incurred on constructing a new residence — covering contractor services and building materials — by lodging the claim within 12 months of the construction's completion, in the form the Federal Tax Authority specifies. Repayment of a refund already granted may later be required if the underlying condition that the property be used as the claimant's residence is subsequently breached.

Article 75 (Decree-Law); Articles 67-69 (Cabinet Decision 52/2017)

Foreign business, tourist and government refund schemes. Article 75 of Federal Decree-Law No. 8/2017, with Articles 67-69 of Cabinet Decision No. 52/2017, allows foreign businesses, tourists, and foreign governments, international organisations and diplomatic bodies to claim VAT refunds under scheme-specific rules — the Business Visitors scheme, the Tourist Refund Scheme, and the Foreign Governments scheme — each with its own eligibility conditions, claim-form particulars, minimum claim amounts (for example AED 2,000 under the Business Visitors scheme), and claim-period deadlines, ranging from 12 months for Business Visitors to 36 months for foreign officials.

Article 78-79 (Decree-Law); Articles 71-72 (Cabinet Decision 52/2017)

VAT record-keeping. Articles 78-79 of Federal Decree-Law No. 8/2017, with Articles 71-72 of Cabinet Decision No. 52/2017, require a Registrant to maintain records of all supplies and imports, all Tax Invoices and Credit Notes issued and received (and alternative documents), records of disposed or non-business-use goods, exported goods records, adjustment and correction records, reverse-charge declarations, and a Tax Record of Due and Recoverable Tax, quoting the Tax Registration Number on all Tax Returns, invoices, credit notes and related correspondence. Real estate records must be retained for 15 years after the end of the relevant Tax Period, and a high-volume e-commerce seller exceeding AED 100,000,000 in e-commerce Taxable Supplies must additionally keep records evidencing the Emirate of receipt of each supply.

Article 76 (Decree-Law); Cabinet Decision 40/2017 Table 3

VAT-specific Administrative Penalties. Article 76 of Federal Decree-Law No. 8/2017, applying Table No. 3 of Cabinet Decision No. 40/2017, sets a distinct penalty table for VAT-specific violations: AED 5,000 for failing to display Tax-inclusive prices; AED 2,500 for failing to notify the Authority of a Profit Margin Scheme election; the higher of AED 50,000 or 50% of the applicable Tax for Designated Zone goods-movement breaches; and AED 2,500 per detected case for failing to issue a Tax Invoice, Tax Credit Note or alternative document within the legally prescribed period, or for non-compliant electronic invoice or credit note issuance.

Article 77 (Decree-Law)

False Registrant status as Tax Evasion. Article 77 of Federal Decree-Law No. 8/2017 provides that a non-Registrant who falsely claims Registrant status in order to acquire reverse-charge oil, gas or Pure Hydrocarbon goods under Article 48(3) — thereby avoiding the VAT that would otherwise be charged to a non-Registrant recipient — is considered to have committed Tax Evasion, and is penalised under the Tax Procedures Law rather than under the ordinary VAT Administrative Penalty regime. This treats the misuse of Article 48(3)'s Registrant-to-Registrant reverse-charge mechanism as a criminal, not merely administrative, violation.

Article 60(2) (Decree-Law); Article 58(4) (Cabinet Decision 52/2017)-ret

Businesses must retain Capital Asset register and related Input Tax adjustment records for at least ten years from first business use, or longer if the Authority extends the period.

Article 72(4)-(6) (Cabinet Decision 52/2017)-ret

Taxable Persons whose e-commerce Taxable Supplies exceed AED 100,000,000 must retain emirate-of-receipt records for 18 months or two years depending on timing.

Article 78(2) (Decree-Law); Article 71 (Cabinet Decision 74/2023, Tax Procedures Executive Regulation)-ret

Taxable persons must retain general VAT records, including supplies, imports, invoices, credit notes and tax records, for five years from the end of the relevant tax period.

Article 71(2) (Cabinet Decision 52/2017)-ret

VAT real estate records must be retained for fifteen years from the end of the tax period to which they relate.

VAT Decree-Law 8/2017 Art 7(2)

A business transfer to a Taxable Person for continued operation is not considered a VAT supply, requiring the transferee to be taxable.