Accounting services in Dubai

Yes, transactions between related companies are generally subject to VAT unless both entities are part of an approved VAT group. The VAT group allows them to transact without charging VAT between them. However, external transactions must still follow standard VAT rules. Proper documentation is crucial for group status.

Generally, exports of services outside the GCC are zero-rated

Yes, if you’re VAT registered and the expenses are eligible.

Yes, you may apply for deregistration if your taxable supplies fall below AED 187,500 in the past 12 months. Approval is subject to FTA review, and all outstanding returns and payments must be cleared first. VAT deregistration can help small businesses reduce compliance burdens. Be sure to plan this carefully to avoid disruption.

Yes, if you’re VAT-registered, you can reclaim input VAT on eligible expenses directly related to your taxable business activities. Expenses must be supported with valid tax invoices and recorded properly in your VAT return. Non-business or mixed-use expenses must be carefully apportioned. Reclaiming VAT improves cash flow when managed accurately.

Services provided to customers outside the GCC are usually zero-rated, but this requires proof of location and usage. If the customer is in the UAE or GCC and VAT-registered, reverse charge rules may apply. Misclassification can lead to fines, so confirm the customer’s status before invoicing. Accurate invoicing ensures compliance and protects your cash flow.

You must register if your taxable supplies and imports exceed AED 375,000 over the past 12 months or are expected to in the next 30 days. This includes revenue from goods, services, and even certain intra-GCC transactions. It’s essential to monitor your revenue regularly. Voluntary registration is also available from AED 187,500.

Most businesses file quarterly VAT returns, but some high-volume businesses are assigned monthly filing by the FTA. Returns must be submitted and paid within 28 days after the tax period ends. Delays lead to automatic penalties and interest. It’s best to maintain monthly books to avoid last-minute stress.

Usually quarterly, depending on your assigned VAT period.

Commercial properties are subject to VAT, residential ones are mostly exempt or zero-rated.

Yes, unless they are in a designated zone and meet specific conditions.

Yes, if goods are given away for free (without consideration), VAT may still apply as a deemed supply. Exceptions exist for samples or gifts under a certain value threshold. Proper documentation and tracking are essential for such transactions. Always consult your accountant before running large promotional campaigns.

Goods and services sold or imported in the UAE are generally taxable.

Incorrect invoices can lead to penalties, denied input VAT claims, and reconciliation issues during audits. Invoices must contain specific details such as TRN, date, tax amount, and itemized descriptions. Using accounting software with VAT compliance features helps reduce errors. Regular reviews of issued invoices are highly recommended.

Penalties include fines, interest on unpaid tax, and potential business suspension.

The reverse charge mechanism shifts the responsibility of VAT payment from the supplier to the recipient of goods or services. It applies mainly to imported services and certain goods transactions. The recipient accounts for both input and output VAT in their return. This simplifies cross-border compliance but requires accurate accounting.

The standard VAT rate is 5%.

Invoices, tax filings, accounting books, and import/export documents.

Penalties include fines for late registration, incorrect returns, delayed payments, or failure to maintain records. The fines can be fixed or percentage-based depending on the violation. Repeat offenses result in escalating penalties. Staying compliant requires timely filings and accurate documentation.

Businesses with taxable supplies exceeding AED 375,000 annually must register.