Since the introduction of Value Added Tax (VAT) in the United Arab Emirates on January 1, 2018, businesses have faced new compliance obligations and complexities. Ashfaq and Associates has been at the forefront of helping UAE businesses navigate the VAT landscape—from initial registration to ongoing compliance, refunds, and audit defense.
With a standard VAT rate of 5%, the UAE VAT regime affects virtually every business transaction, including sales, purchases, imports, and exports. Understanding zero-rated supplies, exempt supplies, input tax recovery, and the intricacies of reverse charge mechanisms requires specialized expertise. Our team has successfully assisted over 500 businesses in achieving and maintaining VAT compliance while optimizing their tax positions.
Whether you're registering for VAT for the first time, struggling with complex VAT scenarios, facing an FTA audit, or dealing with penalties, we provide comprehensive support backed by deep knowledge of Federal Tax Authority (FTA) regulations, cabinet decisions, and public clarifications. Our proactive approach helps you avoid costly mistakes and ensures peace of mind.
Our VAT Services
1. VAT Registration & De-registration
Mandatory VAT registration is required when your taxable supplies and imports exceed AED 375,000 annually, and voluntary registration is available from AED 187,500. We handle the entire registration process with the FTA, ensuring accuracy and compliance.
- Mandatory and voluntary VAT registration
- Tax group registration for related entities
- Registration for non-resident businesses
- VAT de-registration when closing business
- Updating VAT registration details
2. VAT Returns & Filing
Accurate and timely VAT return filing is critical to avoid penalties. We prepare and submit your quarterly or monthly VAT returns, ensuring all transactions are correctly classified and input tax is maximized within legal boundaries.
- Quarterly and monthly VAT return preparation
- Transaction review and classification
- Input tax reconciliation and optimization
- Zero-rated and exempt supply calculations
- E-filing through FTA portal
- Payment planning and remittance
3. VAT Refunds & Claims
Entitled to a VAT refund? We help you navigate the refund process for input tax credits, tourist refunds, and special cases including exports, international services, and businesses in pre-operation phase.
- Input tax refund applications
- Refunds for exports and international transactions
- Pre-trading business refunds
- Refunds for government entities and charities
- Follow-up with FTA on refund status
4. VAT Compliance & Health Checks
Proactive compliance reviews to identify risks and ensure your VAT processes are robust. Our health checks cover transaction classification, record-keeping, tax invoices, and system configurations.
- Comprehensive VAT compliance audits
- Tax invoice and document reviews
- Accounting system and ERP VAT configurations
- Internal controls assessment
- Staff training on VAT compliance
5. VAT Audit Defense & Reconsideration
Facing an FTA audit or received a VAT penalty? We represent you before the Federal Tax Authority, prepare detailed responses, and file reconsideration requests to reduce or eliminate penalties and disputed tax assessments.
- FTA audit representation and support
- Penalty mitigation and reconsideration requests
- Tax assessment appeals
- Voluntary disclosure for past errors
- Dispute resolution and negotiation
6. Transfer Pricing & Cross-Border VAT
Complex international transactions require careful VAT treatment. We advise on transfer pricing implications, import VAT, reverse charge mechanisms, and designation schemes for non-resident suppliers.
- Import VAT and customs duty advisory
- Reverse charge mechanism compliance
- Transfer pricing for related party transactions
- Designated zone and free zone VAT rules
- Cross-border e-commerce VAT
Why Choose Our VAT Services?
Since 2018 Introduction
We've been helping businesses with UAE VAT since day one, with proven expertise across all sectors and scenarios.
FTA-Approved Methodology
Our processes align with FTA guidelines, cabinet decisions, and public clarifications to ensure compliance.
Proactive Risk Management
We identify VAT risks before they become problems, saving you from penalties and audits.
Multi-Industry Experience
From retail to real estate, hospitality to technology—we understand industry-specific VAT challenges.
Common VAT Challenges We Solve
- ✓Late registration penalties — We help with backdated registration and penalty mitigation
- ✓Incorrect tax invoice formats — Ensuring invoices meet FTA requirements
- ✓Input tax recovery issues — Maximizing legitimate input tax claims
- ✓Place of supply confusion — Determining correct VAT treatment for cross-border services
- ✓Real estate VAT complexities — Navigating capital goods scheme and building transactions
Frequently Asked Questions
When do I need to register for VAT in UAE?
Mandatory registration is required if your taxable supplies and imports exceed AED 375,000 in the past 12 months or are expected to exceed this in the next 30 days. Voluntary registration is available from AED 187,500. Certain businesses must register regardless of turnover.
What are the penalties for late VAT return filing?
Penalties range from AED 1,000 for up to 7 days late to AED 10,000 for over 60 days. Additionally, late payment penalties of 2% per month (up to 300% of tax due) and daily penalties for repeated violations can apply. We help avoid and mitigate these penalties.
Can I claim VAT on expenses before registration?
Yes, under certain conditions. You can recover input tax on goods held in stock at registration and on services received within 6 months prior to registration, provided proper documentation exists. We assist with these pre-registration recovery claims.
What's the difference between zero-rated and exempt supplies?
Both have 0% VAT charged to customers, but zero-rated supplies (like exports and international transportation) allow full input tax recovery, while exempt supplies (like residential property rentals and local passenger transport) do not allow input tax recovery. This distinction significantly impacts your business.
How long does VAT refund processing take?
Standard refund processing by the FTA typically takes 20 business days, but can extend to 60 days if additional verification is required. For new businesses and first-time refunds, expect longer timelines. We expedite the process through proper documentation and FTA liaison.