Question 1

Is VAT mandatory in the UAE?

Accepted Answer

VAT registration is mandatory for businesses with taxable supplies exceeding AED 375,000 per year. Voluntary registration is available for businesses exceeding AED 187,500. The standard VAT rate in the UAE is 5%, one of the lowest globally.

Question 2

What is the UAE corporate tax rate?

Accepted Answer

The UAE corporate tax rate is 9% on taxable income exceeding AED 375,000. Income up to AED 375,000 is taxed at 0%. Qualifying free zone companies can benefit from a 0% rate on qualifying income. The tax was introduced on June 1, 2023.

Question 3

How do I register for VAT in Dubai?

Accepted Answer

VAT registration is done through the Federal Tax Authority (FTA) online portal. You need your trade license, passport copies, bank statements, and financial records. AxisOne DC handles the entire registration process, typically completed within 5-10 business days.

Question 4

When are VAT returns due in the UAE?

Accepted Answer

VAT returns are filed quarterly or monthly depending on your annual turnover. The filing deadline is the 28th day following the end of each tax period. Late filing incurs penalties starting from AED 1,000 for the first offense and AED 2,000 for repeat offenses.

Question 5

What are the penalties for non-compliance with UAE VAT?

Accepted Answer

VAT penalties include: AED 10,000 for late registration, AED 1,000-2,000 for late filing, 2-4% monthly for late payment, and AED 10,000 for failure to maintain records. AxisOne DC ensures full compliance to avoid all penalties.

Question 6

Do free zone companies need to pay corporate tax?

Accepted Answer

Qualifying Free Zone Persons (QFZPs) pay 0% corporate tax on qualifying income. To qualify, they must maintain adequate substance, earn qualifying income, and comply with transfer pricing rules. Non-qualifying income is taxed at the standard 9% rate.

Question 7

What is Economic Substance Regulation (ESR) in the UAE?

Accepted Answer

ESR requires UAE companies conducting relevant activities (banking, insurance, shipping, etc.) to demonstrate adequate economic substance including decision-making, employees, and expenses in the UAE. ESR reports must be filed annually.

Question 8

How much do VAT filing services cost in Dubai?

Accepted Answer

VAT filing services with AxisOne DC start from AED 500 per month. This includes VAT return preparation, FTA filing, record maintenance, and compliance advisory. Comprehensive packages including bookkeeping are also available.

Question 9

What is a Tax Residency Certificate (TRC) and do I need one?

Accepted Answer

A TRC is an official document proving your tax residency in the UAE. It is required to benefit from Double Taxation Avoidance Agreements (DTAAs) with 100+ countries. AxisOne DC assists with TRC applications through the Ministry of Finance.

Question 10

What accounting records must UAE companies maintain?

Accepted Answer

UAE companies must maintain financial records for at least 5 years including invoices, receipts, bank statements, contracts, and annual financial statements. Records must comply with IFRS (International Financial Reporting Standards) for corporate tax purposes.

VAT & Accounting Services in Dubai

Financial Compliance Solutions

VAT Registration & Filing

Corporate Tax Registration

Monthly Bookkeeping

Financial Reporting

Audit Support

Economic Substance Regulations

UBO Filing

Stay Compliant, Stay Growing