Value Added Tax (VAT) consultancy and registration

VAT was introduced in the UAE on January 1, 2018, as part of an effort by the government to diversify the country’s revenue sources with a standard rate of 5%.

Also, certain goods and services are either exempted from VAT or zero-rated. Exempted goods and services are not subject to VAT, while zero-rated goods and services are subject to VAT at a rate of 0%. Examples of exempted goods and services include education and healthcare services, while zero-rated goods and services include exports, international transportation, and precious metals.

Businesses in the UAE that have an annual turnover exceeding the threshold of AED 375,000 are required to register for VAT whereas businesses with an annual turnover between AED 187,500 and AED 375,000 can register for VAT voluntarily.

Registered businesses are required to issue VAT invoices to customers for taxable supplies and to file a VAT return every quarter. The VAT return shows the amount of VAT earned through sales and the amount of VAT paid on purchases.

Businesses that fail to register for VAT or comply with VAT regulations may face financial penalties, fines, and other sanctions.

At Innovios, our team can help you to assess your business and to determine if your company has the obligation or not to register for the VAT in order to be compliant with the UAE regulations. In case the registration is required, we can support you in the registration process and quarterly fillings.

Corporate Tax (CT)

On January 2022, the UAE government announced the introduction of a corporate tax, coming into force on June 1st, 2023, with a standard rate of 9.0% applicable on taxable income above AED 375,000.

In this context, all the companies incorporated in UAE, whether they are Mainland or Free Zone Businesses, have the obligation to register to for the corporate tax. However, the free zone companies may continue to benefit from the financial incentive offered to free zones, if the businesses comply with all regulatory requirements.

CT will not apply to:

Incomes derived from employment

Investment in the real estate sector by individuals

Interests, dividends and capital gains

Businesses engaged in the extraction of natural resources

Qualifying income derived by a Qualifying Free Zone Person as defined by the UAE regulations

At Innovios, we can advise you on the corporate tax and support you in the registration and filling processes to ensure that your business is compliant with the UAE tax regulations.

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