Understanding how to Register for VAT in the UAE is important for any business that is registered under the UAE VAT Law . If your business crosses the required income limit, you must charge VAT on your sales, file regular VAT returns, and pay the correct amount to the Federal Tax Authority (FTA) on time. This means calculating the VAT you collect, subtracting the VAT you paid on your purchases , and paying the difference through the FTA’s online portal.
What is Vat ?
VAT is a transaction based indirect tax charged at every stage of the supply chain. While the end consumer ultimately bears the cost, registered businesses collect and remit it, effectively acting as tax collectors on behalf of the Federal Tax Authority through platforms like EmaraTax login.
Why VAT Tax Matters for UAE Businesses
In the UAE VAT law, every registered business needs to file VAT returns either every month or every three months. If the VAT you collect from sales (output VAT) is more than the VAT you’ve paid on purchases (input VAT), you’ll need to pay the difference to the Federal Tax Authority (FTA). You can easily make these payments through the EmaraTax portal using methods like GIBAN or MagnatiPay. Filing your returns and paying on time keeps your business compliant and helps you avoid any fines. This guide explains the steps to make VAT payments in the UAE.
How to register for VAT, According to UAE VAT Law
VAT Registration in the UAE are made through the FTA’s EmaraTax portal using several options:
Credit/Debit Card via MagnatiPay: The simplest way to pay VAT using Visa or Mastercard. Log into EmaraTax, select “Make Payment,” and enter your card details on MagnatiPay. Note: A 2–3% processing fee applies. Ideal for small to mid-sized businesses seeking quick payment and instant confirmation.
eDebit Direct Bank Payment: Pay securely from your UAE bank account via EmaraTax. Supported banks include Emirates NBD, First Abu Dhabi Bank, Dubai Islamic Bank, and Citibank. A fixed AED 10 fee applies, and corporate payments may require approval from signatories. Best for companies avoiding card fees.
Bank Transfer via GIBAN: Each VAT-registered business has a unique Generated IBAN (GIBAN) in EmaraTax. Transfer your VAT payment directly from your bank using this IBAN. Important: Use the correct GIBAN for VAT only to avoid delays. Processing takes up to 24 hours. Suitable for high-value payments.
International SWIFT Transfer: For payments from outside the UAE, use your VAT GIBAN with SWIFT. You’ll need the FTA’s beneficiary details and must transfer in AED. Transfers usually take 3–5 working days, so plan ahead. Ideal for foreign-owned businesses or group entities.
VAT Payment Deadlines
VAT payments must be made by the 28th day after the end of your tax period. The FTA determines whether you file monthly or quarterly when you register.
For instance:
Q1 (Jan–Mar) payments are due by April 28
Monthly returns for July must be paid by August 28
If the deadline falls on a weekend or public holiday, it usually doesn’t change unless the FTA grants an extension. It’s best to pay early because delays caused by banks won’t be accepted as valid reasons for late payment.
What the FTA Charges for Late VAT Payments
The Federal Tax Authority (FTA) enforces strict penalties for late VAT Tax in the UAE:
- 2% penalty on the unpaid tax right after the deadline
- 4% penalty if unpaid after 7 days from the due date
- 1% daily penalty starting from the 30th day, which can accumulate up to 300% of the unpaid amount
For example, a two-month delay on a VAT amount of AED 10,000 could lead to penalties exceeding AED 6,000.
Key Tips to Avoid VAT Penalties
To stay penalty-free and pay your VAT on time, follow these best practices:
- Make your payment at least 24 hours before the deadline, or 7 days early for international transfers.
- Always copy your VAT GIBAN directly from your EmaraTax account to prevent mistakes.
- Include any payment reference numbers given by the FTA.
- Save all payment confirmations and SWIFT receipts for your records.
- Regularly review your transaction history to spot any unpaid fines or penalties.
According to the UAE VAT Law (Federal Decree-Law No. 8 of 2017), all VAT-registered businesses are required to apply VAT on taxable supplies, submit their VAT returns, and make payments within the set deadlines. Failing to meet these deadlines can result in penalties, beginning at 2% of the unpaid amount and potentially rising to as much as 300%.
