No:1 Tax Consultancy in the UAE: Your Vision, Our Expertise

The threshold for mandatory UAE VAT registration is AED 375,000 for taxable supplies in the previous 12 months. This means that businesses exceeding this threshold must register for VAT.

Businesses that are registered for VAT in the UAE can claim VAT refunds if the input tax (VAT paid on purchases and expenses) exceeds the output tax (VAT collected on sales). This typically occurs when a business’s input VAT is higher than its output VAT due to the nature of its operations.

In the UAE, certain goods, services, and transactions may be exempt from Value Added Tax (VAT). As of my last knowledge update in September 2021, some examples of exemptions from VAT in the UAE include:

1. Financial Services: Most financial services, including interest on loans, are generally exempt from VAT.

2. Residential Real Estate: The first supply of residential buildings (within three years of completion) and the supply of bare land are exempt from VAT.

3. Local Passenger Transport: Public transportation services such as buses, trains, and taxis are often exempt from VAT.

4. Educational Services: Supplies of educational services, as well as the supply of goods and services related to education, are typically exempt from VAT.

5. Healthcare Services: Medical services, as well as the supply of goods and services related to healthcare, are generally exempt from VAT.

6. Exports and International Services: Exports of goods and certain international services are zero-rated rather than exempt.