Insights VAT
Dubai VAT: The 5% Rule, Who Registers, and What Is Actually Dubai-Specific
Dubai VAT explained — the 5% federal rate, the AED 375,000 registration threshold, the 28-day filing deadline, and which free zones are designated zones.
Key takeaways
- Dubai VAT is UAE federal VAT — one 5% rate, one law, one portal, no emirate-level rate.
- Registration is mandatory above AED 375,000 of taxable supplies and imports in 12 months; voluntary from AED 187,500.
- Returns and payment are due by the 28th day after each tax period ends.
- Only Cabinet-listed designated zones get the goods fiction — DMCC and IFZA are not on it.
- Federal Decree-Law No. 16 of 2025 amended the VAT law with effect from 1 January 2026.
- The Dubai Municipality housing fee on rent is not VAT and never appears on a VAT-201.
There is no separate Dubai VAT. Value added tax in the UAE is federal, charged at 5% in every emirate under Federal Decree-Law No. 8 of 2017 since 1 January 2018, registered and filed through EmaraTax. Registration is mandatory above AED 375,000 of taxable supplies over a rolling 12 months, and returns are due by the 28th day after each tax period ends.
Dubai VAT is not a Dubai tax. It is UAE federal value added tax, charged at a standard rate of 5% in every emirate under Federal Decree-Law No. 8 of 2017, registered and filed through the Federal Tax Authority’s EmaraTax portal. There is no Dubai VAT rate, no Dubai VAT number and no Dubai VAT return. A company licensed in Deira faces the same rules as one licensed in Ajman.
That is worth stating plainly at the top, because a large share of the confusion we deal with starts from the opposite assumption. People search for Dubai VAT expecting an emirate-level system with its own rates and its own portal, find general UAE material, and never quite establish which parts of what they are reading actually differ in Dubai. Some things genuinely do. This guide separates the federal rules that apply to you regardless of where your licence came from, from the narrower set of things that are specific to Dubai — the designated zones inside the emirate, the refund scheme running through Dubai’s airports, and the Dubai charges that look like tax and are not.
What Dubai VAT actually is, in one paragraph
VAT arrived in the UAE on 1 January 2018 under Federal Decree-Law No. 8 of 2017, with the operational detail set out in Cabinet Decision No. 52 of 2017, the Executive Regulation. It is a consumption tax collected at each stage of the supply chain. A registered business charges output tax on what it sells, recovers input tax on what it buys for taxable purposes, and pays the difference to the Federal Tax Authority each tax period. If input exceeds output, the balance either carries forward or is refunded. Nothing in that architecture varies by emirate, which is why “Dubai VAT” and “UAE VAT” describe the same thing.
5%
Standard UAE VAT rate applying in Dubai and all other emirates, unchanged since 1 January 2018
Source: Federal Decree-Law No. 8 of 2017 on Value Added Tax
The federal rules that apply to every Dubai business
These are the numbers that decide whether you are in the system and when you have to act. Every one of them is federal.
| What | The rule as it stands | Primary source |
|---|---|---|
| Standard rate | 5% on taxable supplies of goods and services | Federal Decree-Law No. 8 of 2017 |
| In force since | 1 January 2018 | Federal Decree-Law No. 8 of 2017 |
| Mandatory registration | AED 375,000 of taxable supplies and imports over the previous 12 months, or reasonable grounds to exceed it in the next 30 days | Cabinet Decision No. 52 of 2017, Art. 7 |
| Voluntary registration | AED 187,500 of taxable supplies or taxable expenses | Cabinet Decision No. 52 of 2017, Art. 8 |
| Application deadline | Within 30 days of becoming required to register | Cabinet Decision No. 52 of 2017, Art. 7 |
| Standard tax period | Three calendar months ending on the date the FTA determines; the Authority may assign a shorter or longer period | Cabinet Decision No. 52 of 2017, Art. 62 |
| Return and payment | Must be received by the FTA no later than the 28th day following the end of the tax period | Cabinet Decision No. 52 of 2017, Art. 64 |
| Deregistration | Application within 20 business days of the trigger event | Cabinet Decision No. 52 of 2017, Art. 14 |
| Designated zones | Listed by Cabinet Decision No. 59 of 2017, as amended | Cabinet Decision No. 59 of 2017 |
| 2026 amendments | Federal Decree-Law No. 16 of 2025, in force 1 January 2026 | Ministry of Finance |
Sources: the consolidated VAT Executive Regulation and the Ministry of Finance announcement of Federal Decree-Law No. 16 of 2025. Checked August 2026. Legislation is amended more often than summaries are updated, so confirm the current position with the FTA before acting on any figure here.
The threshold is the line most Dubai businesses cross without noticing. It is tested on a rolling twelve-month basis, not against a financial year, and it counts imports as well as sales. There is also a forward-looking limb: if you have reasonable grounds to believe you will pass AED 375,000 within the next thirty days, the obligation bites then, not when the revenue lands. Our full breakdown of the VAT registration threshold works through how the rolling test behaves month by month, and how to register for VAT in the UAE covers the EmaraTax application itself.
What a valid tax invoice has to contain
Almost every VAT problem we unwind for a Dubai business starts on the invoice rather than on the return. Article 59 of the Executive Regulation sets the mandatory particulars, and an invoice missing one of them is not a minor formatting issue — it is a document your customer cannot recover input tax against, and a AED 2,500 penalty per detected case for you.
| # | Particular required on a full tax invoice | Note |
|---|---|---|
| a | The words “Tax Invoice” clearly displayed | Not “Invoice”, not “Bill” |
| b | Name, address and TRN of the supplier | The TRN is the one most often mistyped |
| c | Name, address and TRN of the recipient, where the recipient is a registrant | Omit the TRN and your customer’s recovery is at risk |
| d | A sequential or unique invoice number | Must allow the order in the sequence to be identified |
| e | Date of issue | |
| f | Date of supply, if different from the date of issue | The trigger for the 14-day rule |
| g | Description of the goods or services supplied | Generic descriptions invite questions |
| h | Unit price, quantity, tax rate and amount payable, in AED, for each line | Per line, not per invoice |
| i | The amount of any discount offered | |
| j | Gross amount payable, expressed in AED | |
| k | Tax amount charged, in AED, with the exchange rate applied where converted | Foreign-currency invoices must show the AED tax and the rate |
| l | Where the recipient must account for tax, a statement to that effect and the relevant provision | The reverse charge statement |
Reproduced from Article 59(1) of Cabinet Decision No. 52 of 2017 as amended by Cabinet Decision No. 100 of 2024. Last verified 4 August 2026.
A simplified tax invoice carries a shorter set — the words “Tax Invoice”, the supplier’s name, address and TRN, the date of issue, a description of the supply, and the total consideration and tax amount in AED. Under Article 59(5) it may be used where the recipient is not a registrant, or where the recipient is a registrant and the consideration does not exceed AED 10,000. It cannot be used where the reverse charge mechanism applies.
| Invoice question | The rule | Source |
|---|---|---|
| When must it be issued? | Within 14 days of the date of supply | FDL 8 of 2017, Art. 67(1) |
| Can it be electronic? | Yes, if you can securely store a copy and guarantee authenticity of origin and integrity of content | ER Art. 59(8) |
| Can the buyer raise it? | Yes, if both are registrants, they agree in writing, it carries the full particulars, and it says “Tax Invoice raised by buyer” | ER Art. 59(9) |
| Do I need one for a wholly zero-rated supply? | Not if sufficient records exist to establish the particulars | ER Art. 59(3) |
| Can I split one delivery across separate invoices? | Not where the supplies are included on a summary tax invoice already issued | ER Art. 59(6) |
| What if the consideration is in USD? | Show the AED tax amount and the exchange rate applied | ER Art. 59(1)(k) |
Reproduced from Cabinet Decision No. 52 of 2017 and Federal Decree-Law No. 8 of 2017 as amended. Last verified 4 August 2026. From 2027 the same content has to move through the Electronic Invoicing System as structured data — see the timeline below.
Zero-rated, exempt and out of scope — the distinction that decides your refund
Businesses in Dubai lose more money to this distinction than to the rate itself, because getting it wrong in the wrong direction means input tax you can never recover.
| Treatment | VAT charged | Input tax recovery | Typical Dubai examples |
|---|---|---|---|
| Standard-rated | 5% | Recoverable | Most goods and services, including services supplied from a designated zone |
| Zero-rated | 0% | Recoverable | Exports of goods outside the implementing states, qualifying export of services, international transport, certain healthcare and education |
| Exempt | None | Not recoverable | Certain financial services, bare land, local passenger transport, residential leases after the first supply |
| Outside scope | None | Follows the underlying activity | Supplies made wholly outside the UAE; certain designated-zone goods movements |
Categories per Federal Decree-Law No. 8 of 2017 and Cabinet Decision No. 52 of 2017 as amended. Last verified 4 August 2026. Individual treatments turn on conditions in the relevant Article — confirm yours before applying a rate.
Exporting from Dubai: the 90-day rule nobody diarises
Dubai’s economy runs on re-export, so this is the single most common zero-rating question we get. Article 30 of the Executive Regulation sets two conditions for a direct export to be zero-rated: the goods must be physically exported outside the implementing states, or placed into a customs suspension regime under the GCC Common Customs Law, within 90 days of the date of supply; and the exporter must retain either a customs declaration with commercial evidence, a shipping certificate with official evidence, or a customs declaration proving the suspension arrangement.
An indirect export, where the overseas customer arranges collection, adds three more conditions under Article 30(2): the arrangement must be agreed before or at the date of supply, the customer or its agent must obtain the export evidence and give you a copy, the goods must not be used or altered beyond what is needed to prepare them for export, and they must not leave the country in a passenger’s possession.
Miss the 90 days and Article 30(9) is blunt about the consequence: tax is charged on the supply at the rate that would have applied had it been made in the State. The FTA can extend the period on written application under Article 30(7), but only where circumstances beyond the control of both parties prevented export or where the nature of the supply makes 90 days impracticable.
| Export condition | What the Regulation requires | Where it goes wrong |
|---|---|---|
| Physical export | Outside the implementing states, or into customs suspension | Goods sitting in a Dubai warehouse “for the customer” |
| Timing | Within 90 days of the date of supply | Nobody diarises day 90 against the invoice date |
| Evidence | Customs declaration plus commercial evidence, or shipping certificate plus official evidence | Only a commercial invoice and a booking confirmation retained |
| Evidence content | Must identify supplier, consignor, goods, value, destination, mode and route | Waybills that name a freight forwarder and nothing else |
| Movement to a designated zone | Article 30(3): not an export of those goods | Treating a JAFZA delivery as a zero-rated export |
| Indirect export | Arrangement agreed at or before the date of supply | Retrospective paperwork after the customer collects |
| Failure | Tax charged as if supplied in the State, per Art. 30(9) | Discovered at audit, priced at 5% plus penalties |
Reproduced from Article 30 of Cabinet Decision No. 52 of 2017 as amended by Cabinet Decision No. 100 of 2024. Last verified 4 August 2026.
Article 30(3) deserves its own warning. Moving goods into a designated zone from inside the UAE is not an export, so a Dubai supplier delivering to a JAFZA customer cannot zero-rate on that basis. The export invoice format UAE guide works through how a zero-rated export supply has to be documented and invoiced.
For services, Article 31 sets a different test. Export of services is zero-rated where the recipient has no place of residence in an implementing state and is outside the UAE when the services are performed, the services do not relate directly to UAE real estate or to moveable assets located here at the time, and the place of supply is not deemed to be in the UAE. Article 31(2) defines “outside the State” narrowly: a person counts as outside the State if their presence here is less than 30 days and is not effectively connected with the supply.
What is genuinely Dubai-specific
Three things, and they are narrower than the market implies.
Dubai’s designated zones
This is the one that matters commercially. Cabinet Decision No. 59 of 2017 lists specific fenced areas as designated zones, which are treated as outside the UAE for the supply of goods under defined conditions. Several are in Dubai. Independent published versions of the list consistently name Jebel Ali Free Zone (North and South), Dubai Airport Free Zone, Dubai Cars and Automotive Zone (DUCAMZ), Dubai Textile City, Dubai Aviation City, and free zone areas at Al Quoz and Al Qusais. The list has been amended since 2017, so treat any published version as indicative and verify your own zone against the current Cabinet Decision rather than a blog table — including this one.
Two limits do most of the damage when they are missed.
The first is that the fiction covers goods, not services. A logistics company moving cargo between two designated zones may be outside scope on those movements. A marketing agency in the same building, invoicing a client, charges 5%. The zone status of the address is irrelevant to a supply of services.
The second is that many of Dubai’s best-known free zones are not designated zones. DMCC and IFZA are the two we are asked about most often, and neither is on the list. A company there is in an ordinary free zone with ordinary VAT treatment. Our guide to designated zone VAT in the UAE sets out the conditions, the customs-code linkage and the documentation the FTA expects to see behind a zone transaction.
Being in a Dubai free zone is not a VAT position. Being in a Cabinet-listed designated zone, moving goods, with the paperwork to prove it, is a VAT position.
The tourist refund processed at Dubai’s airports
The Tax Refund for Tourists Scheme is national, but a large share of it physically happens at Dubai International and Al Maktoum. Per the UAE Government portal, Planet is the exclusive operator of the tax refund system for tourists, a tax-free purchase is valid on a minimum expenditure of AED 250, and the transaction must be validated at the airport within 90 days of the purchase date. The tourist receives a percentage of the VAT paid rather than the whole amount, with a fixed fee deducted per tax-free tag.
We are deliberately not quoting that percentage or fee here. Published sources currently disagree on the figures and at least one revision has been made during 2026. Confirm the current rate directly with the Federal Tax Authority or Planet before you rely on it for anything. If you run a Dubai retail business, the point that matters operationally is that participation requires registration with the scheme, and that the sale is still a normal taxable supply on your VAT-201 — the refund happens downstream of your return, not inside it.
The Dubai charges that are not VAT
Dubai levies fees that residents and businesses routinely describe as tax, and none of them touch your VAT return.
The Dubai Municipality housing fee is calculated on the annual rental value of a property and collected in twelve monthly instalments through the DEWA bill. It is an emirate-level municipality charge. It is not VAT, it is not FTA-administered, and it does not go on a VAT-201. Confirm the current rate and exemptions with Dubai Municipality or DEWA directly, since emirate fees move independently of federal tax law.
The Dubai Land Department property transfer fee, tourism and municipality fees on hotel bills, and free-zone licensing charges sit in the same bucket: real costs, correctly recorded in your accounts, entirely outside the VAT system. Our overview of the Dubai tax rate maps the full picture of what a Dubai business and resident actually pay across federal and emirate levels, and what “tax free” really means in Dubai covers where the phrase holds and where it stops.
What changed for Dubai VAT in 2026
Federal Decree-Law No. 16 of 2025 amended the VAT law with effect from 1 January 2026. Per the Ministry of Finance, three changes stand out.
Self-invoicing under the reverse charge mechanism is no longer required. Taxable persons are relieved from issuing a self-invoice when applying reverse charge, provided they retain the supporting documents for the transaction. If your process still generates self-invoices for imported services, that is now a documentation exercise rather than a legal requirement — but the retention obligation replaced it, so the file still has to exist.
A five-year deadline now applies to submitting a request to reclaim excess refundable tax after reconciliation, after which the Ministry of Finance states the right to reclaim expires. That puts a hard stop on credits which previously drifted forward without one. Businesses carrying old balances from the early years of VAT need to know which tax period each one originated in, and most accounting systems do not surface that without being asked.
The FTA may also deny an input tax deduction where the supply forms part of a tax-evasion arrangement, and taxpayers are required to verify the legitimacy and integrity of supplies before deducting input tax, following the Authority’s procedures. That is a duty placed on the buyer, which raises the value of ordinary supplier due diligence from good practice to a compliance step.
Our detailed piece on the new UAE VAT law for 2026 walks through the amendments and the phased e-invoicing rollout that sits alongside them.
The Dubai VAT compliance cycle in practice
Once registered, the rhythm is the same everywhere in the UAE.
Every supply you make gets classified when the invoice is raised — standard-rated at 5%, zero-rated, exempt, or outside scope. Getting this right at the point of invoicing rather than at quarter-end is the single biggest determinant of whether your return is a confirmation or an investigation. Every invoice from an overseas supplier gets tested for the reverse charge mechanism, which needs an entry on both sides of the return. Overseas software subscriptions and foreign consultants are the usual omissions.
Input tax gets tested for recoverability before it goes near the return. Entertainment and certain motor vehicle costs are blocked. Then the VAT-201 is built, reconciled to the ledger, and submitted with payment by the 28th day after the tax period ends. Our VAT return filing guide walks the boxes one by one, and the UAE VAT calculator handles the arithmetic on individual amounts.
Records supporting each figure have to exist and be findable years later. When the FTA writes, the quality of the reply is entirely determined by the file behind it.
| Quarter-end task | What good looks like | What triggers questions |
|---|---|---|
| Classify every sale | Rate applied at invoicing, not at quarter-end | A single “sales” account with mixed rates in it |
| Test overseas invoices for reverse charge | Both sides of the return posted, with the supplier’s country recorded | Software subscriptions expensed with no VAT entry at all |
| Test input tax for blocked items | Entertainment and certain motor vehicle costs excluded before the return | Blanket recovery on everything with a tax line |
| Reconcile the VAT control account to the ledger | The return figure and the trial balance agree | A plug adjustment nobody can explain |
| Check zero-rated exports against day 90 | A diary entry per export invoice | An export ledger with no dates against it |
| Check designated-zone movements against evidence | Customs declaration, gate pass and commercial evidence filed together | A delivery note and a hope |
| File and pay by the 28th | Both the return and the money received | Return filed on the 28th, payment initiated on the 28th |
| Retain the file | Indexed to the return line it supports | A folder of PDFs named by supplier |
Task list derived from the obligations in Cabinet Decision No. 52 of 2017 Articles 30, 51, 59 and 64, and Federal Decree-Law No. 8 of 2017 Article 67. Last reviewed 4 August 2026.
The designated-zone conditions, in the Regulation’s own words
Because so much Dubai activity turns on this, it is worth setting out what Article 51 actually requires rather than what the zone’s sales team says.
| Rule | What Article 51 says | Practical consequence in Dubai |
|---|---|---|
| Physical criteria | A specific fenced geographic area with security measures and customs controls monitoring entry and exit of people and goods | An unfenced business park never qualifies |
| Internal procedures | The zone must have internal procedures for keeping, storing and processing goods | Operator-level, but tenants live with the consequence |
| Operator compliance | The operator complies with FTA procedures | A lapse re-characterises the zone as inside the State |
| Change of operation | Breaching the conditions means the zone is treated as inside the State | Status is not permanent |
| Zone-to-zone movement | No tax if goods are not released, used or altered, and the transfer follows GCC customs suspension | Break the chain and it becomes a taxable supply |
| Financial guarantee | The FTA may require a guarantee for tax on goods moved between zones | Cash impact on high-value consignments |
| Goods consumed in a zone | Place of supply is inside the State, unless incorporated into another good, delivered outside the State with evidence, or moved inland with import VAT paid | Office supplies and staff catering are standard-rated |
| Services | Place of supply of any service in a designated zone is inside the State | 5% on consultancy from JAFZA, as from Deira |
| Water and energy | Place of supply is inside the State | Utilities are standard-rated |
| Shortage or own consumption | Untaxed goods consumed by the owner, or a stock shortage, are treated as imported | A stock loss becomes a tax event |
| Residence | A person established in a designated zone has a place of residence in the State | The AED 375,000 threshold applies normally |
Reproduced from Article 51 of Cabinet Decision No. 52 of 2017 as amended by Cabinet Decision No. 88 of 2021. Last verified 4 August 2026. Whether your specific area is a designated zone is determined by Cabinet Decision No. 59 of 2017 and its amendments, not by Article 51.
The final row is the one that ends the “free zone means no VAT” argument. Article 51(10) puts a designated-zone company inside the State for VAT purposes, so registration, returns and record-keeping run exactly as they do for a mainland business.
If you are weighing a logistics or fulfilment address specifically for the goods treatment, our Dubai South free zone guide sets out how the districts differ on it, and where the recoverable input tax on an unpaid invoice ends up is covered in the dunning letter template library, which builds the write-off notice Article 64 requires. Free zone founders working through the licensing side of this should read it alongside our company formation in a Dubai free zone guide, which covers where designated-zone status changes the corporate tax position as well.
What Dubai VAT mistakes actually cost
The penalty schedule changed this year and most published summaries have not caught up. Cabinet Decision No. 129 of 2025 amended Tables 1 and 3 of Cabinet Decision No. 40 of 2017 with effect from 14 April 2026, and the headline change is that late payment moved to a flat annualised rate.
| Violation | Administrative penalty | Table |
|---|---|---|
| Failure to keep the required records | AED 10,000; AED 20,000 for a repeat within 24 months | Table 1, item 1 |
| Failure to submit records in Arabic when requested | AED 5,000 | Table 1, item 2 |
| Late registration application | AED 10,000 | Table 1, item 3 |
| Late deregistration application | AED 1,000 per month, capped at AED 10,000 | Table 1, item 4 |
| Failure to notify the FTA of a change to tax records | AED 1,000; AED 5,000 for a repeat within 24 months | Table 1, item 5 |
| Late tax return | AED 1,000; AED 2,000 for a repeat within 24 months | Table 1, item 8 |
| Late payment of payable tax | 14% per annum, charged monthly on the unsettled amount | Table 1, item 9 |
| Incorrect tax return | AED 500, unless corrected within the return deadline or by a nil-difference disclosure | Table 1, item 10 |
| Voluntary disclosure of an error | 1% per month on the tax difference | Table 1, item 11 |
| Failure to disclose before an audit notice | 15% fixed on the tax difference, plus 1% per month | Table 1, item 12 |
| Obstructing a tax auditor | AED 20,000 | Table 1, item 13 |
| Failure to calculate tax on imported goods | 50% of the unpaid or undeclared tax | Table 1, item 15 |
| Failure to display prices inclusive of tax | AED 5,000 | Table 3, item 1 |
| Failure to notify the FTA of applying the profit margin scheme | AED 2,500 | Table 3, item 2 |
| Breaching designated-zone goods conditions | The higher of AED 50,000 or 50% of the tax on the goods | Table 3, item 3 |
| Failure to issue a tax invoice in time | AED 2,500 per detected case | Table 3, item 4 |
| Failure to issue a tax credit note in time | AED 2,500 per detected case | Table 3, item 5 |
| Failure to meet the conditions for issuing invoices and credit notes electronically | AED 2,500 per detected case | Table 3, item 6 |
Reproduced from the consolidated text of Cabinet Decision No. 40 of 2017 as amended by Cabinet Decisions No. 49 of 2021, No. 108 of 2021 and No. 129 of 2025, published by the Ministry of Finance. Table 1 and Table 3 amendments take effect 14 April 2026. Last verified 4 August 2026.
Items 11 and 12 read together are the argument for self-correction. Finding your own error and disclosing it costs 1% a month on the difference. Waiting until the FTA tells you an audit is coming adds a fixed 15% of the difference on top of the same monthly charge. On a AED 400,000 understatement that gap is AED 60,000 before a single month of interest is counted.
The compliance calendar for a Dubai VAT registrant
| Obligation | Deadline | Source |
|---|---|---|
| Apply to register | Within 30 days of becoming required to register | ER Art. 7(2) |
| Standard tax period | Three calendar months ending on the date the FTA determines | ER Art. 62(1) |
| VAT-201 return | Received by the FTA by the 28th day after the end of the tax period | ER Art. 64(1) |
| Payment of payable tax | Received by the same date as the return | ER Art. 64(3) |
| Issue a tax invoice | Within 14 days of the date of supply | FDL 8 of 2017, Art. 67(1) |
| Apply to deregister | Within 20 business days of the triggering event | ER Art. 14(1) |
| Final return on deregistration | For the last tax period for which you were registered | ER Art. 64(2) |
| Reclaim excess refundable tax | Within 5 years of reconciliation, from 1 January 2026 | Federal Decree-Law 16 of 2025 |
| E-invoicing — appoint an ASP | 31 March 2027, for revenue below AED 50,000,000 | MD 244 of 2025, Art. 5(1)(b) |
| E-invoicing — go live | 1 July 2027, for revenue below AED 50,000,000 | MD 244 of 2025, Art. 5(1)(b) |
| E-invoicing — transmit an invoice | Within 14 days of the Date of Business Transaction | MD 243 of 2025, Art. 6(5) |
Each row checked against the published instrument text on 4 August 2026.
Two of those rows catch Dubai businesses more than the others. Deregistration is a twenty business day window, not twenty calendar days, and it starts at the triggering event rather than at the point somebody notices — a company that stops trading in March and applies in June is already inside the AED 1,000-per-month penalty. And Article 64(3) makes the money, not just the form, the deadline: filing on time and paying two days late still runs the clock on the 14% annual charge.
E-invoicing changes how Dubai VAT is reported
The rate is not changing, but the mechanism for reporting it is. Under Article 3 of Ministerial Decision 243 of 2025 the Electronic Invoicing System applies to any person conducting business in the State, and Article 4 excludes specific transactions rather than specific businesses.
| Milestone | Date | Applies to | Source |
|---|---|---|---|
| Pilot Programme commences | 1 July 2026 | Invited Taxpayer Working Group | MD 244 of 2025, Art. 3(4) |
| Voluntary adoption opens | 1 July 2026 | Anyone who chooses to | MD 244 of 2025, Art. 4 |
| Appoint an ASP, then go live | 30 October 2026, then 1 January 2027 | Revenue at or above AED 50,000,000 | MD 66 of 2026, Art. 1 |
| Appoint an ASP, then go live | 31 March 2027, then 1 July 2027 | Revenue below AED 50,000,000 | MD 244 of 2025, Art. 5(1)(b) |
| Appoint an ASP, then go live | 31 March 2027, then 1 October 2027 | Government entities | MD 244 of 2025, Art. 5(1)(c) |
| Notify the FTA of a system failure | Within 2 business days | Everyone in scope | MD 243 of 2025, Art. 12 |
| Notify your ASP of registration data changes | Within 5 business days | Everyone in scope | MD 243 of 2025, Art. 5(3) |
| Storage of invoices and credit notes | Within the State | Everyone in scope | MD 243 of 2025, Art. 11 |
| Excluded: VAT-exempt or zero-rated financial services | Permanent exclusion | Financial services under ER Art. 42 | MD 243 of 2025, Art. 4(1)(e) |
| Excluded: business-to-consumer transactions | Until the Minister decides otherwise | B2C only | MD 244 of 2025, Art. 5(2) |
Verified against the published texts of Ministerial Decisions No. 243 and No. 244 of 2025 and Ministerial Decision No. 66 of 2026 on the Ministry of Finance website, 4 August 2026.
Article 5(2) of Ministerial Decision 244 of 2025 is the row Dubai retailers should read twice. Business-to-consumer transactions are not subject to the system, and a person engaged exclusively in such transactions is not subject to it either — but only until the Minister decides otherwise. A shop selling to consumers and issuing occasional B2B invoices is in scope for the B2B side today. Our guides to e-invoicing for retail UAE and the e-invoicing phase 2 readiness plan cover what that means at till level and in the ledger respectively.
Choosing help for Dubai VAT
The market for VAT advice in Dubai is large, unregulated as to title, and enormously variable in quality. Anyone with a trade licence covering accounting or tax consultancy can offer the service. The regulated status is the narrower one of FTA-registered tax agent, held by individuals rather than firms, and the only thing it uniquely permits is formal representation before the Authority. For a Dubai SME running standard-rated sales and some imported services, that credential will sit unused for years.
What to check instead is scope: who classifies each supply, who drafts the VAT-201, who holds the records, and who answers when the FTA asks a question. Get it in writing before you sign. Our buyer-side guide to VAT consultants in Dubai sets out the vetting checklist and the red flags.
Velmont Crest provides advisory and preparation support on UAE VAT — registration, classification, return preparation, records and responses. We are not a tax agency and do not represent clients before the FTA; you remain the taxable person who approves and submits. If you want your position reviewed against the rules above, get a quote and we will scope it in writing, or read how we run the cycle on our VAT services in Dubai page.
For the federal picture in full, including zero-rated versus exempt supplies and the mechanics of each return box, start with our complete guide to VAT in the UAE.
Frequently asked questions
- Is there a separate Dubai VAT rate?
- No. VAT in the UAE is federal law and applies identically in all seven emirates. The standard rate is 5% under Federal Decree-Law No. 8 of 2017, in force since 1 January 2018. Dubai has no power to set its own VAT rate, no Dubai VAT registration and no Dubai VAT return. Registration and filing both happen through EmaraTax, the Federal Tax Authority's national portal. A business licensed in Dubai and a business licensed in Sharjah face exactly the same VAT rules, thresholds and deadlines.
- What is the VAT rate in Dubai?
- 5% on standard-rated supplies of goods and services. Some supplies are zero-rated, meaning VAT applies at 0% and you can still recover related input tax — exports outside the GCC implementing states and certain healthcare, education and international transport fall here. A smaller set is exempt, including some financial services and bare land, where no VAT is charged and related input tax cannot be recovered. The difference between zero-rated and exempt is the one that decides whether you get your input tax back, so it is worth getting right at the invoice stage.
- When does a Dubai business have to register for VAT?
- Registration becomes mandatory once taxable supplies and imports exceed AED 375,000 over the previous 12 months, or where you have reasonable grounds to believe you will exceed it within the next 30 days. The application is due within 30 days of becoming required to register. Voluntary registration is available from AED 187,500 of taxable supplies or taxable expenses. These thresholds sit in Cabinet Decision No. 52 of 2017 and apply nationally, so a Dubai licence changes nothing about them.
- Do free zone companies in Dubai pay VAT?
- Usually yes. Being in a free zone does not exempt a business from VAT. A narrow set of zones is listed by Cabinet Decision as designated zones and treated as outside the UAE for the supply of goods under specific conditions. That fiction covers goods only. Services supplied from or within a designated zone are treated as supplied in the UAE and carry 5% in the normal way. Many well-known Dubai free zones, including DMCC and IFZA, are not designated zones at all, so the question to ask is whether your specific zone is on the current Cabinet list.
- When are Dubai VAT returns due?
- The VAT-201 return and the payment must both reach the Federal Tax Authority no later than the 28th day following the end of the tax period. The standard tax period is three calendar months ending on the date the Authority determines, though the FTA can assign a shorter or longer period to a particular business. Both the return and the money need to land by the deadline — filing on time and paying late still triggers a late-payment penalty.
- What changed in UAE VAT in 2026?
- Federal Decree-Law No. 16 of 2025 amended Federal Decree-Law No. 8 of 2017 with effect from 1 January 2026. Per the Ministry of Finance, taxable persons are relieved from issuing self-invoices when applying the reverse charge mechanism, provided they retain the supporting documents. A five-year deadline now applies to submitting a request to reclaim excess refundable tax after reconciliation, after which the right to reclaim expires. The FTA may also deny an input tax deduction where the supply forms part of a tax-evasion arrangement, and taxpayers are required to verify the legitimacy of supplies before deducting input tax.
- Is the Dubai housing fee a form of VAT?
- No. The Dubai Municipality housing fee is an emirate-level municipality charge calculated on the annual rental value of a property and collected in monthly instalments through the DEWA bill. It is not VAT, it is not administered by the Federal Tax Authority, and it never appears on a VAT-201 return. It is one of several Dubai charges that get informally called tax. Confirm the current rate and exemptions with Dubai Municipality or DEWA before relying on any figure, as emirate-level fees change independently of federal tax law.
- Can tourists claim VAT back in Dubai?
- Yes, through the national Tax Refund for Tourists Scheme, not a Dubai-specific one. Per the UAE Government portal, Planet is the exclusive operator of the tax refund system for tourists, the scheme is valid on a minimum expenditure of AED 250, and the transaction must be validated at the airport within 90 days of the purchase date. A fee is deducted per tax-free tag and the tourist receives a percentage of the VAT paid rather than the full amount. Check the current fee and percentage with the FTA or Planet before quoting figures, as these have been revised.
- Do I need a Dubai-based accountant for UAE VAT?
- Not for the filing itself. VAT is federal, the return goes through EmaraTax and nothing about the process is tied to an emirate. Where a Dubai-based adviser genuinely helps is in the work that is physically local — stock counts at a Jebel Ali warehouse, collecting gate-pass and customs documentation for designated-zone movements, or sitting down with your operations team. Dubai firms also tend to see more export, free-zone and designated-zone work simply because more of it happens in Dubai, and that pattern recognition is worth something if your business does any of it.
- What are the penalties for getting Dubai VAT wrong?
- The federal penalty tables in Cabinet Decision No. 40 of 2017, as amended by Cabinet Decision No. 129 of 2025 with effect from 14 April 2026, apply in Dubai as everywhere else. Late registration is AED 10,000. A late return is AED 1,000 the first time and AED 2,000 if repeated within 24 months. Late payment runs at a monthly penalty of 14% per annum on the unsettled tax. Correcting an error yourself through a voluntary disclosure costs 1% per month on the difference; waiting until the FTA notifies you of an audit adds a fixed 15% on top. Verify current figures with the FTA before acting.
- What has to be on a valid UAE tax invoice?
- Article 59(1) of the VAT Executive Regulation lists twelve particulars: the words "Tax Invoice" displayed clearly, the supplier's name, address and TRN, the recipient's name, address and TRN where they are a registrant, a sequential or unique invoice number, the date of issue, the date of supply where it differs, a description of what was supplied, the unit price, quantity, tax rate and amount payable in AED for each line, any discount, the gross amount in AED, the tax amount in AED with the exchange rate where converted, and a reverse charge statement with its legal reference where the recipient must account for the tax.
- When can I use a simplified tax invoice in Dubai?
- Article 59(5) of the Executive Regulation allows it in two situations: where the recipient is not registered for VAT, and where the recipient is registered but the consideration for the supply does not exceed AED 10,000. It cannot be used where the reverse charge mechanism applies. A simplified invoice needs fewer particulars — the words "Tax Invoice", your name, address and TRN, the date of issue, a description of the supply, and the total consideration and tax amount in AED. It is the format most Dubai retail point-of-sale systems produce by default.
- How long do I have to export goods to keep the zero rate?
- Ninety days from the date of supply. Article 30 of the VAT Executive Regulation zero-rates a direct export where the goods are physically exported outside the implementing states, or placed into a customs suspension regime under the GCC Common Customs Law, within 90 days — and where you retain either a customs declaration with commercial evidence, a shipping certificate with official evidence, or a customs declaration proving the suspension. Miss it and Article 30(9) charges tax at the rate that would have applied to a domestic supply. The FTA can extend the period on written application in limited circumstances.
- Is delivering goods to a Dubai free zone an export?
- No, and this is one of the more expensive misunderstandings in Dubai. Article 30(3) of the VAT Executive Regulation states expressly that moving goods into a designated zone from a place in the State, or supplying goods to a designated zone, is not an export of those goods. A Dubai supplier delivering into JAFZA or DAFZA cannot zero-rate on export grounds. Whether any other relief applies depends on the designated-zone rules in Article 51, which have their own conditions on how the goods are handled and evidenced.
- Do I have to charge VAT on services billed to an overseas client from Dubai?
- Not necessarily, but the test in Article 31 is narrower than most people assume. Export of services is zero-rated where the recipient has no place of residence in an implementing state and is outside the UAE when the services are performed, the services do not relate directly to UAE real estate or to moveable assets here, and the place of supply is not deemed to be in the UAE. Article 31(2) treats a person as outside the State only if their presence here is under 30 days and not effectively connected with the supply, and Article 31(3) blocks the relief where the benefit is foreseeably received in the UAE by someone who cannot fully recover input tax.
Filed under: dubai vat, vat dubai, VAT, FTA, designated zones, EmaraTax, Federal Decree-Law 8 of 2017, Federal Decree-Law 16 of 2025
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