A taxable person must retain VAT invoices and related documents for a minimum of 5 years. This retention period is crucial for ensuring compliance with VAT regulations and for any potential audits or reviews conducted by the Federal Tax Authority (FTA).
If taxable supplies fall below the threshold, the business must still comply with VAT obligations until the end of the tax period. It may apply for deregistration if supplies remain below the threshold for a full 12-month period.
The business should adjust the overclaimed VAT amount in its next VAT return. It must also correct any previous returns if the overclaim is significant and notify the FTA if necessary.
Services provided to customers outside the UAE are generally zero-rated, meaning the VAT rate is 0%. The business must ensure it maintains proper documentation to support the zero-rating of the service.
- If the service is provided to a customer outside the designated zone or to a mainland entity, VAT is
- typically applicable at the standard rate of 5%. Services within a designated zone may be treated as outside the UAE for VAT purposes depending on the nature of the service.
No, such imports are considered exempt from the UAE’s value-added tax.
No, not all free zones in the UAE are designated for VAT purposes. Only those free zones that have been officially recognized by the UAE Cabinet as designated zones are treated as such under VAT regulations. Businesses operating in these designated zones must adhere to specific VAT rules applicable to them.
Yes, VAT is charged at a rate of 5% on services provided in designated zones.
Most businesses are required to file VAT returns on a quarterly basis, although larger businesses with higher taxable supplies may be required to submit their returns monthly.
Most businesses are required to file VAT returns on a quarterly basis, although larger businesses with higher taxable supplies may be required to submit their returns monthly.
VAT should be accounted for at the time of receiving the advance payment. If the service spans multiple periods, VAT is recognized on the portion of the service provided in each period.
