The UAE introduced VAT at 5% in 2018. Almost a decade later, the framework is mature, well-documented, and — for a fintech founder — still full of nuances that trip up first-time filers.
When you must register
Mandatory registration kicks in when taxable supplies in the last 12 months, or expected in the next 30 days, exceed AED 375,000. Voluntary registration is available from AED 187,500 and is often worth doing early — it lets you reclaim input VAT on setup costs.
What's zero-rated, exempt, and standard
Most fintech services delivered inside the UAE are standard-rated at 5%. Services exported to non-GCC customers may be zero-rated. Certain financial services (interest, life insurance) are exempt — which is different from zero-rated and means you cannot reclaim related input VAT.
The two mistakes we see constantly
- Treating all payments from foreign customers as zero-rated without confirming where the service is 'consumed'
- Not issuing a compliant tax invoice within 14 days of the taxable supply — the FTA is strict about the required fields
The compliant invoice checklist
- The words 'Tax Invoice' displayed clearly
- Your name, address, and TRN
- Customer's name and address (and TRN if they're VAT-registered)
- A sequential invoice number and issue date
- Description, quantity, unit price, and total for each line
- The tax rate, the tax amount, and the gross total
"VAT is a systems problem, not an accounting problem. Get the invoice template right on day one and the quarterly return writes itself."
#UAE#VAT#Tax
NK
Nadia Karim
Writing on compliance at ASHASH
