VAT and excise tax in the UAE
How VAT is charged and recovered in the UAE, when a business must or may register, what a tax invoice and a VAT return need to show, how refunds work, how e-invoicing is being introduced and which goods carry excise tax on top.
VAT in the UAE is charged at 5% on most supplies of goods and services and on imports. A business must register with the Federal Tax Authority (FTA) once its taxable supplies and imports exceed AED 375,000 over the previous 12 months, or are expected to within the next 30 days. A registered business charges VAT on its sales, recovers VAT on its business costs and pays the difference.
Standard VAT rate
5%
UAE VAT is charged at a standard rate of 5% on taxable supplies and imports of goods and services, unless a supply is zero-rated or exempt.
- Applies to
- Supplies and imports under Federal Decree-Law No. 8 of 2017 on VAT
- Source
- Federal Decree-Law No. 8 of 2017 on Value Added Tax and its amendments (unofficial translation), Article 3, Federal Tax Authority
- Checked
Zero-rated and exempt supplies
Some supplies are zero-rated, which means taxed at 0%: exports of goods and services outside the GCC, international transport, investment-grade precious metals, the first supply of a new residential building within three years of completion, and designated education and healthcare services.
Others are exempt: specified financial services, residential buildings sold or leased after their first supply, bare land and local passenger transport. No VAT is charged on them, and the business cannot recover the VAT on its costs for them.
Registration, invoices and returns
A business below the mandatory threshold may register voluntarily once its taxable supplies and imports, or its taxable expenses, exceed AED 187,500. A registered business issues a tax invoice within 14 days of a supply and files a VAT return for each tax period, normally three calendar months. The return and the payment are due by the 28th day after the period ends. Since 14 April 2026, VAT paid late carries a penalty of 14% a year, charged for each month or part of a month. Registered businesses account for VAT on imported services and qualifying imports through the reverse charge, and tourists can reclaim VAT through the refund scheme.
E-invoicing
The e-invoicing pilot started on 1 July 2026. Businesses with revenue of AED 50 million or more must appoint an accredited service provider by 30 October 2026 and go live by 1 January 2027. Smaller businesses follow, with an accredited service provider by 31 March 2027 and the system live by 1 July 2027.
Excise tax
Excise tax is a separate tax on five categories of goods. Tobacco, electronic smoking devices and their liquids, and energy drinks are taxed at 100% of the excise price. Since 1 January 2026, sweetened drinks are taxed per litre by sugar content, up to AED 1.09 a litre for the sweetest.
The calculators below add or remove VAT, check the registration thresholds, work out excise tax and price a late payment.
Guides on VAT and excise
-
UAE VAT rates: 5%, zero-rated and exempt supplies explained
How UAE VAT works: the 5% standard rate, which supplies are zero-rated or exempt, VAT on rent and in free zones, and why the difference matters for input VAT.
-
VAT registration in the UAE: thresholds and how to register
When UAE VAT registration is mandatory (AED 375,000) or voluntary (AED 187,500), how the 12-month and 30-day tests work, and how to register and deregister.
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How to file a VAT return in the UAE: periods, deadlines and payment
How to file a UAE VAT return: tax periods, the 28-day deadline to file and pay, the main boxes, claiming excess input VAT and late filing penalties.
-
Reverse charge under UAE VAT: when it applies and how to account for it
When the UAE VAT reverse charge applies: imports of goods and services, oil and gas, precious metals, electronics and metal scrap, with a worked example.
-
Tax invoice requirements in the UAE: what a valid VAT invoice must show
What a valid UAE tax invoice must show, when a simplified invoice is allowed, the 14-day rule, credit notes, foreign currency, penalties and e-invoicing.
-
UAE e-invoicing: who must comply and the 2026-2027 deadlines
How UAE e-invoicing works: who is in scope, the 2026 and 2027 deadlines to appoint a provider and go live, excluded transactions and October 2026 changes.
-
VAT refunds for tourists in the UAE: how the scheme works
How tourists claim back UAE VAT: who qualifies, the AED 250 minimum, the 13% deduction, 90-day validation, cash limits and how retailers join the scheme.
Calculators for this topic
VAT calculator
Adds VAT to a net price or takes it out of a VAT-inclusive price.
VAT registration checker
Whether registering for VAT is mandatory, voluntary or not yet needed, and the deadline to apply.
Excise tax calculator
The excise tax on tobacco, energy drinks, vaping products and sweetened drinks.
Customs duty calculator
Customs duty and import VAT on a shipment, from the cost, insurance and freight value.
USD to AED converter
Converts US dollars to dirhams and back at the official pegged rate.
Late tax payment penalty calculator
The penalty on corporate tax, VAT or excise tax paid late, month by month.
Frequently asked questions
What is the VAT rate in the UAE?
The standard rate is 5% on taxable supplies and imports. Some supplies, such as exports outside the GCC, are zero-rated at 0%, and others, such as bare land and local passenger transport, are exempt.
Is VAT registration mandatory in the UAE?
It is for a resident business whose taxable supplies and imports exceeded AED 375,000 over the previous 12 months, or are expected to in the next 30 days. A business above AED 187,500 may register voluntarily. A non-resident making taxable supplies in the UAE must register whatever their value, unless another party in the UAE settles the VAT.
When is a VAT return due?
The return must reach the Federal Tax Authority, and the VAT be paid, by the 28th day after the end of the tax period. The standard tax period is three calendar months, though the FTA can set a different one.
What is the difference between zero-rated and exempt supplies?
A zero-rated supply is taxable at 0%. An exempt supply carries no VAT at all, and the business cannot recover the VAT on its costs for that supply.
Which goods carry excise tax in the UAE?
Since 1 January 2026: tobacco and tobacco products, electronic smoking devices and tools, the liquids used in them, energy drinks and sweetened drinks. Sweetened drinks are taxed per litre according to their sugar content.
When does e-invoicing become mandatory?
Businesses with revenue of AED 50 million or more must use the Electronic Invoicing System by 1 January 2027, and smaller businesses by 1 July 2027. Sales to consumers are outside the system until the Minister decides otherwise.
Sources
Official and primary sources we used for this page, with the date we last opened each one.
- Federal Decree-Law No. 8 of 2017 on Value Added Tax and its amendments (unofficial translation), Article 3
- Registration For VAT
- Value Added Tax (VAT) Registration (service card, FAQ 1)
- The Executive Regulation of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (Cabinet Decision No. 52 of 2017 and its amendments, consolidated to Cabinet Decision No. 149 of 2026, unofficial translation), Article 59(13)
- The Administrative Penalties for Violation of Tax Laws in the UAE: Cabinet Decision No. 40 of 2017 and its amendments (consolidated to Cabinet Decision No. 129 of 2025, unofficial translation), table 1, items 9 and 14
- Ministerial Decision No. 244 of 2025 on the Implementation of the Electronic Invoicing System, Articles 3 and 4
- Ministerial Decision No. 66 of 2026 Amending Certain Provisions of Ministerial Decision No. 244 of 2025 on the Implementation of the Electronic Invoicing System
- Ministerial Decision No. 197 of 2026 Amending Certain Provisions of Ministerial Decision No. 243 of 2025 on the Electronic Invoicing System, Article (4) Exclusions
- Cabinet Decision No. 197 of 2025 on Excise Goods, Tax Rates or Amounts Imposed on Excise Goods, and the Methods of Calculating the Excise Price (unofficial translation), Article 2
- Ministry of Finance Announces Decision introduces a Minimum Excise Price for Liquids Used in Electronic Smoking Devices Effective 1 September 2026 (Cabinet Decision No. 137 of 2026)