VAT & Accounting Services Dubai

Managing VAT compliance and financial records in Dubai demands expertise in UAE tax regulations and accounting standards. Our VAT and accounting services in Dubai help businesses maintain accurate financial records, meet Federal Tax Authority requirements, and prepare for the significant regulatory changes taking effect in 2026.

Understanding VAT in the UAE

The UAE introduced Value Added Tax on January 1, 2018, at a standard rate of 5%. While this rate remains among the lowest globally, the compliance requirements are comprehensive and strictly enforced by the Federal Tax Authority (FTA).

VAT Registration Thresholds

Your VAT registration obligations depend on your taxable supplies:

Annual Taxable Supplies	Registration Requirement
Above AED 375,000	Mandatory registration required
AED 187,500 – AED 375,000	Voluntary registration available
Below AED 187,500	Registration not permitted

Even businesses below the mandatory threshold often benefit from voluntary registration. It allows input VAT recovery and signals credibility to corporate clients who prefer working with VAT-registered suppliers.

VAT Categories and Rates

Not all supplies are taxed equally. Understanding these categories is essential for accurate accounting:

• Standard Rate (5%): Most goods and services supplied in the UAE
• Zero Rate (0%): Exports, international transport, certain healthcare and education services, residential property (first sale/lease)
• Exempt: Financial services (most), bare land, local passenger transport, residential property (subsequent supplies)

The distinction between zero-rated and exempt supplies significantly impacts your VAT recovery position. Zero-rated suppliers can recover input VAT, while exempt suppliers cannot. Proper classification requires professional guidance to optimize your tax position.

Critical 2026 Changes: E-Invoicing Mandate

The UAE is implementing mandatory e-invoicing that will fundamentally change how businesses handle invoicing and VAT compliance. Understanding and preparing for these changes is essential for continued operations.

What E-Invoicing Requires

The new system mandates that all B2B and B2G transactions flow through the national e-invoicing platform connected to the Peppol network. This means:

• FTA-certified accounting software must be implemented
• Invoices must be generated, transmitted, and stored electronically in approved formats
• Real-time or near-real-time reporting to tax authorities
• Digital signatures and authentication requirements
• Integration with existing ERP and accounting systems

Businesses using manual processes or non-compliant software face significant operational disruption if they delay preparation. Our accounting team helps you assess current systems and implement compliant solutions before deadlines.

2026 VAT Regulation Updates

Beyond e-invoicing, January 2026 brought several VAT regulation changes:

• Simplified paperwork requirements: Reduced documentation burden for standard transactions
• Self-invoicing removal: Eliminated complexities around self-invoicing procedures
• 5-year refund rule: VAT refund claims must be submitted within 5 years of the relevant tax period

Corporate Tax and Your Accounting Obligations

The UAE corporate tax introduced in 2023 adds another layer to your accounting requirements. At 9% on taxable profits exceeding AED 375,000, it demands accurate profit calculation and proper expense documentation.

Corporate Tax Accounting Requirements

Proper corporate tax compliance requires:

• Audited financial statements for larger businesses (threshold dependent on jurisdiction)
• Tax Registration Number (TRN) even for businesses below the taxable threshold
• Tax returns filed within 9 months of financial year end
• Proper transfer pricing documentation for related party transactions
• Clear separation of exempt income (such as qualifying dividends)

The interaction between VAT and corporate tax requires integrated accounting systems that track both obligations accurately. Our services ensure your financial records support both compliance requirements efficiently.

Our VAT Services

Setup Dubai Business provides comprehensive VAT services in Dubai covering every aspect of your tax compliance journey.

VAT Registration

We handle your complete VAT registration with the Federal Tax Authority. This includes determining your registration category, preparing required documentation, submitting applications, and obtaining your Tax Registration Number. For businesses with complex structures or multiple entities, we ensure proper group registration where beneficial.

VAT Implementation

Becoming VAT-registered is just the beginning. Implementation involves configuring your systems to capture VAT correctly on every transaction. We help you:

• Set up VAT codes in your accounting software
• Configure correct rates for different supply types
• Design compliant invoice templates
• Establish input VAT tracking procedures
• Train your team on VAT handling

VAT Return Preparation and Filing

VAT returns must be filed quarterly or monthly depending on your turnover. We prepare and file your returns accurately and on time, ensuring:

• Output VAT calculated correctly on all taxable supplies
• Input VAT claimed only on eligible expenses with proper documentation
• Adjustments applied for bad debts, corrections, and exempt supplies
• Returns submitted before deadlines to avoid penalties
• Payment reminders and reconciliation with your records

VAT Recovery

Many businesses leave recoverable VAT unclaimed due to documentation gaps or misunderstanding of eligibility. We review your historical records to identify recovery opportunities and implement systems to maximize legitimate input VAT claims going forward. Remember the 5-year refund limitation makes timely action important.

VAT Health Checks and Audit Support

FTA conducts VAT audits regularly. Our health check service reviews your VAT processes before problems arise, identifying risks and correcting issues proactively. If you receive an FTA audit notification, we provide representation and support throughout the process.

Our Accounting and Bookkeeping Services

Beyond VAT, our accounting services in Dubai provide the financial foundation your business needs for compliance, decision-making, and growth.

Accounting System Setup

Starting with the right accounting infrastructure saves significant time and cost. We design and implement accounting systems tailored to your business:

• Chart of accounts design aligned with your industry and reporting needs
• Accounting software selection and implementation (including e-invoicing ready solutions)
• Integration with banking, invoicing, and inventory systems
• Internal control procedures to prevent errors and fraud
• Staff training on system usage and best practices

Ongoing Bookkeeping

Accurate, timely bookkeeping forms the foundation of financial management. Our bookkeeping services include:

• Transaction recording and categorization
• Bank reconciliation and cash management
• Accounts receivable and payable management
• Payroll processing and WPS compliance
• Monthly financial statement preparation

We offer both on-site and cloud-based accounting options, allowing you to access your financial data anytime while we handle the processing.

Financial Reporting and Analysis

Numbers without insight provide limited value. Beyond basic bookkeeping, we deliver:

• Monthly management reports with key performance indicators
• Cash flow forecasting and working capital analysis
• Budget vs. actual variance analysis
• Profitability analysis by product, service, or customer segment
• Year-end financial statement preparation

Record Reconstruction

If your accounting records have fallen behind or contain errors, our reconstruction service rebuilds accurate financial history from bank statements, invoices, and other source documents. This is often essential before corporate tax filing or during business sale processes.

Data Migration

Switching accounting software or consolidating systems requires careful data migration to maintain historical records. We handle the technical transfer while ensuring data integrity and continuity of your financial history.

Why Outsource Accounting in Dubai

Many businesses in Dubai benefit from outsourcing accounting rather than building internal teams. Consider these factors:

Cost Efficiency

Hiring qualified accountants in Dubai involves significant salary, visa, and benefit costs. Outsourcing provides access to professional expertise at a fraction of employment costs, with the flexibility to scale services up or down based on business needs.

Regulatory Expertise

UAE tax and accounting regulations change regularly. With corporate tax, evolving VAT rules, and the e-invoicing mandate, staying current requires continuous learning. Our team maintains up-to-date knowledge as our core business, ensuring your compliance doesn’t depend on a single employee’s knowledge.

Business Focus

Time spent managing accounting is time not spent on core business activities. Outsourcing lets you focus on growth while knowing financial compliance is handled professionally.

Continuity

Employee turnover creates knowledge gaps and transition costs. Our service provides continuity regardless of personnel changes, with documented processes and institutional knowledge maintained across your engagement.

Who We Serve

Our VAT and accounting services support businesses across Dubai’s diverse economic landscape:

• Startups and SMEs: Cost-effective solutions that grow with your business
• Free zone companies: Specialized knowledge of free zone accounting requirements
• Trading companies: High-volume transaction processing and inventory accounting
• Professional services firms: Time-based billing and project accounting
• E-commerce businesses: Multi-channel sales tracking and marketplace reconciliation
• Branch offices: Coordination with head office reporting requirements

Whether you operate in Dubai Design District, Dubai Internet City, JAFZA, or mainland Dubai, our team understands your jurisdiction’s specific requirements.

Working With Setup Dubai Business

Our accounting and VAT services integrate with our broader business consulting services. This provides advantages for businesses also requiring:

• Company formation with accounting systems configured from day one
• PRO services with coordinated documentation
• Bank account opening with proper financial record preparation
• Trade license renewals tied to compliance verification

Having a single partner for business setup and ongoing compliance eliminates coordination gaps and ensures consistent support throughout your business journey in Dubai.

Getting Started

Whether you need to register for VAT, prepare for e-invoicing compliance, or establish proper accounting systems, our team provides clear guidance and practical implementation support.

Contact us for an initial consultation to discuss your current situation and requirements. We will assess your needs and provide a clear proposal covering scope, timeline, and investment.

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Frequently Asked Questions

When do I need to register for VAT in Dubai?

VAT registration becomes mandatory when your taxable supplies exceed AED 375,000 annually. You must register within 30 days of crossing this threshold. Voluntary registration is available for businesses with supplies between AED 187,500 and AED 375,000.

What are the penalties for VAT non-compliance?

FTA penalties include AED 10,000 for late registration, 2% of unpaid tax immediately for late payment (plus 4% monthly thereafter), and AED 1,000-20,000 for late return filing. Intentional evasion carries penalties up to 300% of evaded tax plus potential criminal prosecution.

Do free zone companies need to pay VAT?

Free zone companies are subject to VAT but may benefit from zero-rating or exemption on certain transactions. Supplies within designated zones and direct exports are typically zero-rated. Supplies to UAE mainland are subject to standard 5% VAT. Each situation requires individual assessment.

How often do I file VAT returns?

Standard VAT return periods are quarterly. Businesses with annual supplies exceeding AED 150 million must file monthly. Returns are due within 28 days following the end of each tax period.

What records must I keep for VAT purposes?

The FTA requires retention of all tax invoices, credit notes, import/export documents, and records of taxable supplies and purchases for a minimum of 5 years. With e-invoicing implementation, electronic record keeping in approved formats becomes mandatory.

Can I recover VAT on expenses incurred before registration?

Yes, input VAT recovery is possible on goods held at registration date and services received within 5 years before registration, subject to specific conditions. Assets must still be in use for taxable business purposes, and proper documentation must exist.