Call for Assistance: +971 503506152
Call for Assistance: +971 503506152
How to calculate my total taxable turnover for VAT registration purposes in the UAE.
May 30, 2023

When determining your VAT taxable turnover for both the voluntary and mandatory VAT registration thresholds, you must take into account the following:

  • The value of Standard Rated Taxable Supplies: this includes the total value of supplies you make that are subject to the standard rate of VAT.
  • The value of Zero-Rated Supplies: zero-rated supplies are goods or services that are still subject to VAT but at a 0% rate. The value of these supplies should be included in your taxable turnover calculation.
  • The value of Reverse Charge Items: reverse charge applies to certain goods or services where the responsibility for reporting the VAT shifts from the supplier to the recipient. The value of these supplies should be included in your taxable turnover.
  • The value of Imports for which Import VAT is levied: If you import goods into a country where VAT is levied on imports, the value of those imports should be considered in your taxable turnover calculation.

It is important to note that exports are considered to be Zero Rated and should be included in your VAT registration threshold calculation.

Exempt supplies, which are supplies that are not subject to VAT, should not be included in your taxable turnover.

Please be aware that even a sole trader (i.e. a business within a limited company) providing taxable supplies must register for VAT if they reach the threshold.

If you require expert tax advice in the UAE, please feel free to get in contact.

more guides

Theta 7 - An Online Accounting Firm in the United Arab Emirates

Spondoo, a leading online accounting firm, has launched Theta 7, its new branch in the United Arab Emirates. Theta 7 is an online accounting firm that offers a range of accounting services to businesses in the UAE, leveraging technology to offer accurate, timely and cost-effective solutions. With its launch in 2023, Theta 7 is set to revolutionise the accounting industry in the UAE.

Taking my clients out for drinks or dinner? How it works in the eyes of the UAE Federal Tax Authority

Most jurisdictions now restrict or disallow client entertainment expenses, and the UAE is no exception to this. When you take a client out for dinner or drinks, or even paying for a joint golfing trip, this is client entertainment. You can indeed pay for this type of expense via the business, and it is still legitimate to do so.

When considering tax rate thresholds, how is UAE corporate tax calculated?

If a company has a taxable profit of 400,000 AED, the calculation will be (375,000 AED x 0%) + (25,000 AED x 9%) giving a tax bill for the period of 2,250 AED.

Is Dubai Truly Tax-Free? 

Simply put - Yes and no: There is no income tax on a person’s salary, wages, bank interest, dividends, or capital gains in Dubai, however, from June 2023 corporation tax was introduced

Can I Avoid Corporation tax by paying all my profits as a salary in the UAE?

Our answer is – it is not that simple, and the FTA (Federal Tax Authority) are too smart for that one.

Are Free Zone companies subject to tax in the United Arab Emirates (UAE)?

It is important to note that Free Zone companies are not exempt from corporation tax in the UAE, but they may qualify for a 0% tax rate. This is an important distinction as all Free Zone companies be required to register for corporation tax with the Federal Tax Authority (FTA) and file returns at least annually.
1 2 3 5
Information provided on the site is merely guidance that may change in line with UAE law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Theta7 is a trading name for THETA 7 Accounting & Bookkeeping L.L.C, an authorised & licensed accounting firm under the Ministry of Economy and the Federal Tax Authority of the United Arab Emirates.
© Copyright 2023 - Theta 7 - All Rights Reserved
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram