VAT Filing in Dubai

The first late filing incurs a penalty of AED 1,000. Subsequent late filings within 24 months incur AED 2,000 each. Additionally, late payment of VAT attracts a 2% penalty on the unpaid amount immediately, plus 4% on the 7th day, and 1% daily thereafter (capped at 300% of the tax due).

No. Certain expenses are blocked from input tax recovery, including entertainment expenses for non-employees, personal-use motor vehicles, and goods or services not used for making taxable supplies. Employee entertainment is 50% recoverable. Always ensure claims are supported by valid FTA-compliant tax invoices.

If the error results in a tax difference exceeding AED 10,000, you must file a voluntary disclosure through EmaraTax. For errors below AED 10,000, you can adjust the figures in the next VAT return. Filing a voluntary disclosure before the FTA discovers the error demonstrates good faith and may reduce penalties.

VAT returns must be filed and any VAT due paid within 28 days from the end of the tax period. For quarterly filers (e.g., Q1 Jan-Mar), the deadline is April 28. Late filing incurs AED 1,000 for the first offence, doubling to AED 2,000 for repeat offences within 24 months. Late payment incurs additional percentage-based penalties.

Goods moving between designated zones may be outside VAT scope. Goods moving from a designated zone to mainland attract 5% VAT. Services between zones and mainland are generally standard-rated. We ensure each transaction type is correctly classified on your Dubai business's VAT return.

Input VAT on business-related employee expenses (business travel, client entertainment up to limits, uniforms) is recoverable. VAT on personal employee benefits may be treated as deemed supplies. We review employee expense claims to maximise legitimate input tax recovery for Dubai businesses.