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United Arab Emirates VAT guidelines

FACTSHEET
Country codeAE
Tax nameValue Added Tax (VAT)
Tax AuthorityFederal Tax Authority (FTA)

Overview​

The United Arab Emirates levies Value Added Tax (VAT) at a standard rate of 5% on the supply and import of goods and services. VAT was introduced by Federal Decree-Law No. 8 of 2017, which came into effect on 1 January 2018 (Article 85); the 5% standard rate is set by Article 3 of the Decree-Law. [1] VAT is administered by the Federal Tax Authority (FTA). [2]

The UAE also introduced a federal Corporate Tax for financial years starting on or after 1 June 2023, but this guide focuses on VAT and indirect-tax compliance.

Source snapshot — UAE VAT at 5% since 1 January 2018 Source snapshot captured 19 July 2026 — original (u.ae — the UAE government portal)

TRN & registration​

VAT registration is completed online through the FTA's EmaraTax platform. On approval, the business is issued a Tax Registration Number (TRN), which appears in the dashboard of the taxpayer's e-Services account; the FTA's stated processing time is 20 business days from receipt of a completed application. [1]

  • Mandatory registration — AED 375,000. A UAE-resident business must register if the total value of its taxable supplies and imports exceeded AED 375,000 over the previous 12 months, or is anticipated to exceed it within the next 30 days. This threshold does not apply to foreign businesses — non-residents making taxable supplies in the UAE must register regardless of value. [2]
  • Voluntary registration — AED 187,500. A business may register voluntarily if its taxable supplies and imports, or its taxable expenses, exceeded AED 187,500 in the previous 12 months. [2]

Source snapshot — FTA registration thresholds: AED 375,000 mandatory / AED 187,500 voluntary Source snapshot captured 19 July 2026 — original (Federal Tax Authority)

You can check a UAE TRN with our United Arab Emirates TRN validator.

Tax rates​

  • Standard rate: 5% — applies to most supplies and imports of goods and services (Article 3, Federal Decree-Law No. 8 of 2017). [1]
  • Zero rate: 0% — Article 45 of the Decree-Law zero-rates, among others: direct or indirect exports outside the Implementing States; international transport of passengers and goods; supply of certain means of transport (air, sea, land) and related goods/services; investment precious metals; the first supply of residential buildings within 3 years of completion; supply or import of crude oil and natural gas; specified education services (government-owned or funded institutions); and preventive and basic healthcare services. [1]
  • Exempt — Article 46 exempts: specified financial services; the supply of residential buildings (other than the zero-rated first supply); bare land; and local passenger transport. Exempt suppliers cannot recover input VAT on related costs. [1]

FTA directives on tax transactions​

Alongside the VAT Decree-Law and its Executive Regulation, the Federal Tax Authority publishes Directives on Tax Transactions on its legislation portal. Five 2026 directives have been published there, all in July 2026 — three of them (Nos. 3, 4 and 5) across mid-to-late July: [1]

DirectiveSubjectDate
No. 1 of 2026Judicial Expert Services10 July 2026
No. 2 of 2026Adjustments of Output Tax and Input Tax following a Registrant's exit from a Tax Group10 July 2026 (portal Publish Date); issued 8 July 2026; effective 1 August 2026
No. 3 of 2026Method of Converting the Value of Digital Currencies into UAE Dirham17 July 2026 (portal Publish Date)
No. 4 of 2026Fees and Charges forming part of the Life Insurance Contract and life reinsurance contract14 July 2026 (signed)
No. 5 of 2026Method to Determine the Value of Deemed Supplies of Services20 July 2026 (signed)

Source snapshot — the FTA legislation portal listing for Directive on Tax Transactions No. 3 of 2026 on converting the value of digital currencies into UAE dirham, showing Issue Date: NA and Publish Date: Jul 17, 2026 Source snapshot captured 2026-07-28 — original

The dates above for Nos. 1–3 are the Publish Date shown on the FTA legislation portal, whose own Issue Date field for Directives Nos. 3, 4 and 5 shows NA. For Directives Nos. 4 and 5, this guide instead cites the signature date printed on the directive's own closing page (given in both the Hijri and Gregorian calendars), verified this run by downloading each published PDF directly and reading it with pdftotext: Directive No. 4 is signed 14 July 2026 (29 Muharram 1448H), and Directive No. 5 is signed 20 July 2026 (6 Safar 1448H). [1] [2] [3]

Correction: an earlier version of this guide stated Directive No. 5's date as 22 July 2026. That figure is corrected here to 20 July 2026 — the date on the directive's own signature block — and every mention on this page has been updated to match. Nos. 1 and 2 carry a portal issue date of 10 July 2026 matching their publication date.

Directive No. 2 of 2026 (Adjustments of Output Tax and Input Tax following a Registrant's exit from a Tax Group), issued 8 July 2026, is effective from 1 August 2026. Downloaded and read directly with pdftotext this run: where a Person ceases to be a member of a VAT Tax Group but remains a VAT Registrant, and there are adjustments relating to Taxable Supplies made or Taxable Expenses incurred by that Person before leaving the Tax Group — where those supplies or expenses were previously declared in the Tax Group's own Tax Returns — the Registrant must make those adjustments in its own Tax Returns, in accordance with the VAT Law and its Executive Regulation. Adjustments include reductions in the value of previously declared Taxable Supplies and reductions in the value of Taxable Expenses on which Input Tax was previously recovered through the Tax Group's returns. The Registrant must retain the supporting documents and records evidencing that the adjustments relate to Taxable Supplies or Taxable Expenses declared before it left the Tax Group. [4]

Directive No. 3 of 2026 is the one to act on if you take consideration in digital currency. UAE VAT is accounted for in dirhams, so the conversion method you apply feeds straight into your output-tax figures, your tax-invoice amounts and your record-keeping. Read the published directive on the FTA legislation portal (tax.gov.ae) and align your conversion and documentation method to it before your next VAT return — several third-party summaries circulating since publication describe a specific conversion mechanic that the FTA's published listing does not itself state, so do not configure a tax engine from those. [1]

Directive No. 4 of 2026 (signed 14 July 2026) provides that services connected with a life insurance or life reinsurance contract are treated as forming part of the VAT-exempt supply of life insurance, provided all three conditions hold: the services are necessary for making that supply; they are directly connected with the provision or transfer of ownership of the contract; and the consideration for them forms an integral part of the total consideration payable under the contract — per Article 42 of the VAT Executive Regulation. Fees for managing, operating or executing a life insurance/reinsurance contract are the kind of charge this covers. A service that is independent in nature, or for which a separate consideration is charged, remains a distinct taxable supply. Insurers and reinsurers should test their fee and charge schedules against this bundling test rather than assuming a blanket exemption for anything billed as a life-insurance fee. [2]

Directive No. 5 of 2026 (signed 20 July 2026) sets the method for valuing a deemed supply of services under Article 37 of the VAT Law: the value is the total costs — direct and indirect — on which the taxable person incurred input tax to make that supply. The mechanism: (1) determine the open market value of the services (or of comparable services, where the deemed supply's own open market value cannot be determined); (2) strip out the profit element by dividing that open market value by (1 + the net profit margin) — using the taxable person's own margin from its preceding financial year, or the prevailing sector average where the taxable person's own margin cannot be determined; (3) calculate what percentage of the taxable person's total costs for that preceding financial year carried input tax; and (4) apply that percentage to the estimated total cost from step (2). The resulting figure is the Article 37 value of the deemed supply. [3]

Invoice requirements​

A tax invoice must be issued and delivered within 14 calendar days from the date of every taxable supply. For the supplier it fixes the date of supply and the tax period in which output tax is accounted for; for the recipient it is the primary documentary evidence supporting VAT recovery. [5]

Standard full tax invoice​

Required informationNotes
The words "tax invoice" clearly displayed—
A sequential tax invoice number, or a unique number identifying the invoice and its order in any sequence—
Date of issue—
Date of supplyOnly if different from the invoice date
Name, address and TRN of the supplier—
Name and address of the recipient, together with their TRN if registered—
Description of the goods or services provided—
For each good or service: unit price, quantity or volume supplied, VAT rate, and amount payable expressed in UAE DirhamPer line item
Gross amount payable expressed in UAE Dirham—
The amount of any discount offered—
Total VAT expressed in UAE Dirham, together with the rate of exchange applied and the source of that rateThe exchange-rate source must be stated on the invoice
Where the domestic reverse charge applies: a statement that the customer is required to account for VAT, plus a reference to the relevant provision of the Federal VAT lawA bare "reverse charge applies" note is not enough — cite the provision

Source snapshot — FTA guidance listing the information a standard full UAE tax invoice must include, down to the per-line unit price, quantity, VAT rate and the amount payable expressed in UAE Dirham Source snapshot captured 2026-08-10 — original

Simplified tax invoice​

A taxable person may issue a simplified tax invoice instead of a full one where either: [5]

  • the recipient is not registered for VAT; or
  • the recipient is registered and the consideration (VAT-inclusive price) is AED 10,000 or less.

FTA's own worked examples: an individual buying AED 40,000 of clothes → simplified invoice is fine (unregistered recipient). A registered store buying AED 10,001 of clothes → full invoice required (registered recipient, over the threshold).

A simplified tax invoice must contain at least: the term "tax invoice" in a prominent place; the name, address and TRN of the supplier; the date of issue; a description sufficient to identify the goods or services; and the total consideration and VAT charged.

Self-billing (recipient-created tax invoices)​

The recipient may issue the tax invoice on the supplier's behalf, provided all of the following hold: the recipient is registered for VAT; the parties agree in writing that the supplier will not issue a tax invoice; the invoice meets every requirement of a standard full tax invoice; and it clearly displays the words "buyer-created tax invoice". [5]

Currency, rounding and corrections​

  • Invoices issued in a foreign currency must be converted into UAE Dirham using an exchange rate approved by the Central Bank. [5]
  • Where the VAT amount is a fraction of a fils, it must be rounded to the nearest fils. [5]
  • Errors are corrected via tax credit notes or additional tax invoices — not by reissuing the original. [5]

Electronic invoices, summaries and exceptions​

  • A tax invoice may be issued electronically provided a copy is securely stored in compliance with the record-keeping requirements, and the authenticity of origin and integrity of content are guaranteed. (This is the pre-existing VAT rule; it is separate from the forthcoming mandatory e-invoicing regime described in E-invoicing below.) [5]
  • A summary monthly tax invoice must be issued where the supplier makes more than one supply to the same person in the same calendar month. [5]
  • No tax invoice is required for a wholly zero-rated supply where sufficient records exist to establish its details. Where issuing an invoice is genuinely impractical, a taxable person may apply to the FTA for an administrative exception. [5]

What a compliant invoice looks like​

The Ministry of Finance publishes a worked sample of an Electronic Tax Invoice — the human-readable rendering of the PINT AE structured invoice — showing the seller and buyer blocks (each with TRN, legal registration number and type, authority name, address and electronic address), the Peppol business-process and specification identifiers, the invoice header, a line-item table, a VAT breakdown and the totals ladder down to the total payable amount. [8]

Treat it as an illustration of the required data, not a prescribed layout: the UAE mandates the fields and the PINT AE specification, not a visual design — and taxpayers may not add optional fields of their own into PINT AE. [8]

Source snapshot — UAE Ministry of Finance Electronic Invoicing Guidelines section 12.1, the human readable version of a sample Electronic Tax Invoice Source snapshot captured 2026-08-10 — original

Further authority: FTA Decision No. 4 of 2018 on Tax Invoices, FTA Decision No. 7 of 2019 on Tax Invoices and Tax Credit Notes, and VAT Public Clarification VATP006.

E-invoicing​

The UAE is rolling out a national Electronic Invoicing System based on a Decentralised Continuous Transaction Control and Exchange (DCTCE) model — a Peppol five-corner architecture in which the supplier (Corner 1) and buyer (Corner 4) exchange invoices through Accredited Service Providers (ASPs) (Corners 2 and 3), with tax data reported to the FTA (Corner 5). Electronic invoices are exchanged as XML based on the Peppol PINT AE specification. [1]

Legal framework. The system is framed by Ministerial Decision No. 243 of 2025 (scope and obligations of the Electronic Invoicing System) and Ministerial Decision No. 244 of 2025 (implementation timeline), supported by Ministerial Decision No. 64 of 2025 (ASP accreditation) and Cabinet Decision No. 106 of 2025 (violations and penalties). In 2026 the Ministry of Finance issued targeted amendments: Ministerial Decision No. 66 of 2026 amends Decision 244, and Ministerial Decision No. 56 of 2026 amends Decision 64. [1] [2]

4-corner launch (April 2026). On 21 April 2026 the Ministry of Finance launched the optional eInvoicing 4-Corner model: businesses select an MoF-accredited Service Provider through the FTA's EmaraTax system, complete onboarding, and begin exchanging structured e-invoices between Corner 1 and Corner 4 ahead of the tax-reporting (Corner 5) go-live and the July pilot. [3]

Pilot and voluntary phase (from 1 July 2026). Electronic invoicing commenced on 1 July 2026 with a Pilot Programme for a selected group of taxpayers who agree in writing to participate; the MoF announced the pilot launch of the 5-Corner model on 26 June 2026. All businesses, regardless of revenue, may implement e-invoicing voluntarily from 1 July 2026 — administrative penalties apply only from a business's mandatory implementation date. [4] [5]

Mandatory timeline. Under Ministerial Decision No. 244 of 2025 as amended: [2] [5]

EntityAnnual revenueAppoint ASP byImplement e-invoicing from
Business≥ AED 50,000,00030 October 2026 (extended from 31 July 2026)1 January 2027
Business< AED 50,000,00031 March 20271 July 2027
Government entityN/A31 March 20271 October 2027

Source snapshot — MoF e-invoicing implementation timeline table Source snapshot captured 18 July 2026 — original (UAE Ministry of Finance); the 30 October 2026 ASP extension is per the May 2026 amendments announcement:

Source snapshot — MoF announcement extending the ASP appointment deadline to 30 October 2026 Source snapshot captured 19 July 2026 — original (UAE Ministry of Finance)

Re-verified 3 August 2026 directly against the legislative text: the Ministry of Finance's consolidated republication of Ministerial Decision No. 244 of 2025 carries a footnote on Article 5(1)(a) — "Paragraph amended as per Ministerial Decision No. 66 of 2026" — confirming the ≥ AED 50,000,000 threshold's ASP deadline is 30 October 2026 (with mandatory implementation from 1 January 2027) and that the sub-AED-50m and government-entity phases in the table above are unchanged. Downloaded and read directly with pdftotext this run. [6]

Scope. E-invoicing applies to B2B and B2G business transactions (including G2B and G2G), regardless of VAT registration status. Supplies made to consumers (B2C) are not in scope — there is no obligation to issue an electronic invoice for a supply to a consumer. Transactions between members of the same VAT group are in scope but benefit from a 24-month grace period starting 1 January 2027. A person in scope must appoint one ASP for both sending and receiving; the Peppol participant identifier issued by the FTA is 0235 followed by the person's 10-digit TIN. [5]

Recent changes​

Dated, officially-sourced changes to UAE VAT and e-invoicing, newest first. The full history is in our worldwide tax-updates feed.

  • 2026-08-01 — FTA Directive on Tax Transactions No. 2 of 2026 (issued 8 July 2026) takes effect: a Person who ceases to be a member of a VAT Tax Group but remains a VAT Registrant must make adjustments in its own Tax Returns for Taxable Supplies made or Taxable Expenses incurred before leaving the Tax Group, and retain the supporting documentation. (UAE Federal Tax Authority) — see issue
  • 2026-07-20 — FTA Directive on Tax Transactions No. 5 of 2026 (signed 20 July 2026 — corrected on this page from an earlier, mistaken 22 July date) sets the Article 37 valuation method for deemed supplies of services: open market value of the services (or comparable services), less the profit margin (the taxable person's own net margin, or the sector average), scaled by the ratio of input-tax-bearing costs to total costs. (UAE Federal Tax Authority) — see issue
  • 2026-07-17 — The FTA issued Directive on Tax Transactions No. 3 of 2026 on the Method of Converting the Value of Digital Currencies into UAE Dirham, published on the FTA legislation portal with a publish date of 17 July 2026, alongside Directive No. 4 of 2026 (signed 14 July 2026, life-insurance and life-reinsurance contract fees and charges) and Directive No. 5 of 2026 (signed 20 July 2026, valuation of deemed supplies of services). These follow Directives Nos. 1 and 2 of 2026 (both 10 July 2026, judicial expert services and output/input tax adjustments after a registrant exits a Tax Group), bringing the 2026 total on the portal to five. (UAE Federal Tax Authority) — see issue
  • 2026-07-14 — FTA Directive on Tax Transactions No. 4 of 2026 (signed 14 July 2026) provides that fees and charges connected with a life insurance or life reinsurance contract form part of the VAT-exempt supply of life insurance where they are necessary for, and directly connected with, that supply and their consideration is an integral part of the contract's total consideration, per Article 42 of the VAT Executive Regulation; services charged independently remain separate taxable supplies. (UAE Federal Tax Authority) — see issue
  • 2026-07-13 — UAE e-invoicing rulebook consolidated: Ministerial Decision No. 66 of 2026 amends MD No. 244 of 2025 (ASP appointment deadline for AED 50m+ businesses set at 30 October 2026; mandatory go-live unchanged at 1 January 2027) and MD No. 56 of 2026 amends the ASP accreditation rules, alongside the MoF's Electronic Invoicing Guidelines V1.1 (dated 1 June 2026). (UAE Ministry of Finance) — see issue
  • 2026-07-01 — The pilot phase of the Electronic Invoicing System (5-Corner model) opened with a selected group of taxpayers; voluntary adoption is available to any business from the same date. (UAE Ministry of Finance) — see issue
  • 2026-05-10 — The Ministry of Finance announced targeted amendments to the e-invoicing decisions, extending the deadline for businesses with annual revenue of AED 50 million or more to appoint an Accredited Service Provider from 31 July 2026 to 30 October 2026; mandatory go-live remains 1 January 2027. (UAE Ministry of Finance) — see issue
  • 2026-04-21 — The Ministry of Finance launched the optional eInvoicing 4-Corner model: businesses can appoint an MoF-accredited Service Provider via the FTA's EmaraTax system and begin exchanging structured e-invoices. (UAE Ministry of Finance) — see issue

Frequently Asked Questions​

Who must register for VAT in the UAE, and what are the thresholds?​

A UAE-resident business must register once the total value of its taxable supplies and imports exceeded AED 375,000 over the previous 12 months, or is expected to exceed that within the next 30 days. Voluntary registration opens at AED 187,500 (taxable supplies and imports, or taxable expenses). The mandatory threshold does not apply to foreign businesses. Registration is done on the FTA's EmaraTax platform, and the approved applicant receives a Tax Registration Number (TRN). [1] [2]

When does e-invoicing become mandatory for my business?​

In phases, by revenue, per Article 5 of Ministerial Decision No. 244 of 2025 as amended by Ministerial Decision No. 66 of 2026. A pilot began 1 July 2026, with voluntary adoption open to all from that date. Businesses with annual revenue ≥ AED 50 million must appoint an Accredited Service Provider by 30 October 2026 (extended from 31 July 2026) and implement from 1 January 2027. Businesses below AED 50 million must appoint an ASP by 31 March 2027 and implement from 1 July 2027; government entities must also appoint an ASP by 31 March 2027 and implement from 1 October 2027. Confirmed this run directly against the consolidated republication of MD 244/2025 carrying the MD 66/2026 amendment footnote. [1] [2] [3]

Are B2C transactions covered by the UAE e-invoicing mandate?​

No. The system covers B2B and B2G transactions (including G2B and G2G). Supplies made to consumers are not within scope, and there is no obligation to issue an electronic invoice for a B2C supply — though normal VAT tax-invoice rules under the Decree-Law continue to apply. [1]

What is the difference between zero-rated and exempt supplies under UAE VAT?​

Both are charged at 0%, but zero-rated suppliers (Article 45: exports, international transport, investment precious metals, first supply of residential buildings within 3 years, crude oil and natural gas, specified education and healthcare) can recover input VAT, while exempt suppliers (Article 46: specified financial services, other residential supplies, bare land, local passenger transport) cannot recover input VAT on related costs. [1]

What happens to VAT adjustments when a Person leaves a UAE VAT Tax Group?​

Under the FTA's Directive on Tax Transactions No. 2 of 2026, issued 8 July 2026 and effective from 1 August 2026, a Person who ceases to be a member of a VAT Tax Group but remains a VAT Registrant must make adjustments in its own Tax Returns for Taxable Supplies made or Taxable Expenses incurred before it left the Tax Group, where those supplies or expenses were previously declared in the Tax Group's own Tax Returns. This covers reductions in the value of previously declared Taxable Supplies and reductions in the value of Taxable Expenses on which Input Tax was previously recovered through the Tax Group's returns. The Registrant must retain the supporting documents and records evidencing that the adjustments relate to pre-exit Taxable Supplies or Taxable Expenses. [1]

How should digital-currency consideration be converted into AED for UAE VAT?​

The FTA addressed this in Directive on Tax Transactions No. 3 of 2026, "Method of Converting the Value of Digital Currencies into UAE Dirham", published on the FTA legislation portal at tax.gov.ae with a publish date of 17 July 2026 (the portal shows no issue date for it). The published directive is the authoritative statement of the required method — obtain it there before writing a conversion rule into your tax engine, because several widely circulated third-party summaries describe a mechanic that the FTA's published listing does not state. It was published alongside Directive No. 4 of 2026 (signed 14 July 2026, fees and charges forming part of life insurance and life reinsurance contracts) and Directive No. 5 of 2026 (signed 20 July 2026, method to determine the value of deemed supplies of services), and follows Directives Nos. 1 and 2 of 2026 (both 10 July 2026) — five 2026 directives in all. If you receive consideration in digital currency, align your AED conversion and record-keeping to Directive No. 3 before your next VAT return. [1]

How does Directive No. 4 of 2026 treat life insurance contract fees and charges under UAE VAT?​

Directive on Tax Transactions No. 4 of 2026, signed 14 July 2026, treats services connected with a life insurance or life reinsurance contract as forming part of the VAT-exempt supply of life insurance, provided the services are necessary for making that supply, are directly connected with the provision or transfer of ownership of the contract, and the consideration for them forms an integral part of the total consideration payable under the contract — per Article 42 of the VAT Executive Regulation. Fees for managing, operating or executing the contract fall within this test. A service that is independent in nature, or for which a separate consideration is charged, remains a distinct taxable supply. [1]

How is the value of a deemed supply of services calculated under Directive No. 5 of 2026?​

Directive on Tax Transactions No. 5 of 2026, signed 20 July 2026, sets the valuation method for a deemed supply of services under Article 37 of the VAT Law: the value equals the total direct and indirect costs on which the taxable person incurred input tax. The method: determine the open market value of the services (or comparable services, if not determinable); strip out the profit element by dividing that value by (1 + the taxable person's net profit margin, or the sector average where the taxable person's own margin cannot be determined); work out what percentage of total costs carried input tax; and apply that percentage to the profit-stripped cost figure. [1]

What is the five-corner (PINT AE) model, and what launched in April 2026?​

The UAE's e-invoicing runs on a Peppol-based five-corner model: supplier (C1) → supplier's ASP (C2) → buyer's ASP (C3) → buyer (C4), with both ASPs reporting tax data to the FTA (C5). Invoices are UAE-standard XML per the PINT AE specification. On 21 April 2026 the MoF launched the optional 4-corner exchange (C1–C4, without FTA reporting) so businesses could onboard with an accredited Service Provider via EmaraTax ahead of the 1 July 2026 pilot. [1] [2]

For more details on UAE tax identifiers, see our United Arab Emirates Tax ID Guide. To verify a UAE TRN, see our UAE TRN verification guide or use the TRN validator.