VAT and Corporate Tax

VAT and Corporate Tax

LoVAT or Value Added Tax is an indirect tax, also referred to as a type of general consumption tax. VAT registration in the Unite Arab Emirates is mandatory for businesses with an annual revenue exceeding AED 375,000. Voluntary registration is allowed for other smaller businesses.

Goods and Services which are subject to a 0% VAT rate

The 0% VAT rate applies to any goods or services that are exported outside the VAT implementing GCC member states, any goods or services destined for an international transportation, supplies of certain land, air, and sea means of transportation, investment-grade precious metals, newly constructed residential properties and certain education services and healthcare services.


years of experience

Most Trusted Company

We adapt our delivery to the way your work, whether as an external provider.

Adding more light to VAT registration

VAT is a consumption tax levied on the supply of goods and services. It is an essential requirement for businesses operating in the UAE. With the implementation of VAT in the UAE, small and medium-sized enterprises need to navigate the complexities of registration and compliance to avoid penalties. It is imposed at each stage of the supply chain, with businesses acting as intermediaries responsible for collecting and remitting the tax.
If the taxable supplies and imports of a business exceed the mandatory registration limit of AED 375,000 the entity or the business must register for VAT. Also, businesses can also choose to register for VAT voluntarily if their supplies and imports exceed 185,000 AED. Businesses in the United Arab Emirates are required to record their financial transactions and maintain up to-date records.

VAT Exemptions Now, VAT exempted goods and services are

Goods and services suppliers that are deemed exempt from VAT are not required to register with the Federal Authority and, is no need to file for returns.

  • Financial Services

  • Residential Building

  • Undeveloped Land

  • Local passenger Transportation

Goods that are brought by tourists and taken outside the country (VAT will only be charged on any products that are consumed or used during their stay in the country).
Certain goods transportation between companies registered in freezones classified as “designated zone”


12+ Years Experience

Are VAT and Corporate Tax the same?

As we put light into the VAT or the Value Added Tax, now it is mandatory to get a correct picture for corporate tax. It is a profit-based tax levied on companies with a standard statutory rate of 9 per cent. It is applicable to companies whose income exceeds 375,000 dirhams. Profits below that threshold will be subject to a 0-percentage rate. Corporate tax will be levied on salaries or other personal income from employment, be in the government, semi-government, or the private sector entities according to the Finance Ministry.

Who are exempted from Corporate Tax Registration

Government and government-controlled organizations as well as extractive businesses and non-extractive natural resource businesses that meet the certain terms and conditions of the ministry are not required to register under the tax law.
Apart from these, exemptions are also there for organizations which includes pension or investment funds and public benefit organizations. Small-scale businesses in the UAE with a revenue of 3 million dirhams or less can also benefit from a new corporate tax relief program.

Clearly, there are differences between VAT and corporate tax. But the documentation part both will be similar. The generally required documents are:

  • Trade license copy of the company

  • Commercial registration certificate

  • Invoices or purchase orders issued to and by the firm or entity

  • Company’s authorized signatory details

There are the generally required documents. Apart from these, if any required documents are requested from the ministry or tax authority, the entity is obligated to submit the same.