Quick answer
VAT accounting software in the UAE records sales and purchases with the right VAT treatment (standard 5 percent, zero-rated, exempt, or out of scope), issues compliant tax invoices, applies reverse charge on imports, and prepares the VAT return filed on the FTA EmaraTax portal. It should also be ready for the UAE e-invoicing mandate.
- The UAE introduced VAT at 5 percent on 1 January 2018.
- Registration is mandatory above AED 375,000 in taxable supplies and imports.
- Tax invoices must contain required details.
- E-invoicing becomes mandatory in phases from 2027.
What are the basics of UAE VAT?
| Topic | Rule |
|---|---|
| Standard rate | 5 percent |
| Mandatory registration | Taxable supplies and imports above AED 375,000 in 12 months |
| Voluntary registration | Above AED 187,500 in supplies or expenses |
| Returns | Usually quarterly, sometimes monthly, filed on EmaraTax |
| Authority | Federal Tax Authority (FTA) |
Check the FTA website for current rules and any changes.
Which VAT treatments must software handle?
- Standard-rated supplies at 5 percent.
- Zero-rated supplies, such as many exports and certain education and healthcare services.
- Exempt supplies, such as some residential property and certain financial services.
- Out-of-scope transactions.
- Reverse charge on imports of goods and services.
- Designated zone rules for some free zones.
What must a UAE tax invoice include?
- The words Tax Invoice.
- Supplier name, address, and Tax Registration Number (TRN).
- Customer details and TRN where applicable.
- Invoice number and date.
- Description, quantity, and price of goods or services.
- VAT rate and VAT amount in AED.
- Total amount payable.
Simplified tax invoices are allowed in some cases. Follow FTA guidance.
How does software help with the VAT return?
- Code transactions. Every line gets a tax code when entered.
- Reconcile. Match VAT accounts to the general ledger.
- Review. Check reverse charge, imports, and adjustments.
- Prepare the return. Produce figures by emirate and box.
- File and pay. Submit on EmaraTax by the deadline.
- Keep records. Store invoices and records for the required period.
How does UAE e-invoicing affect VAT software?
The UAE Ministry of Finance is introducing mandatory e-invoicing in phases, with large businesses going live first from January 2027, through accredited service providers. VAT software must produce structured invoice data that an accredited provider can transmit. See e-invoicing in the UAE.
How does Hudace handle UAE VAT?
Hudace tax and trade applies indirect tax rules (GST and VAT) automatically, supports tax codes, returns and filings, e-invoicing and reporting, and reconciliation, with accounting and close for the general ledger.
Frequently asked questions
What is the VAT rate in the UAE?
5 percent standard rate.
When is VAT registration mandatory?
When taxable supplies and imports exceed AED 375,000 in 12 months.
Does the FTA approve accounting software?
The FTA has published lists of accredited tax accounting software over time. Check the FTA website for the current position.
How often are VAT returns filed?
Usually quarterly, sometimes monthly, as assigned by the FTA.
What is reverse charge?
The buyer accounts for VAT on certain imports instead of the supplier.
Are exports zero-rated?
Many exports of goods and services are zero-rated, subject to conditions.
Where are VAT returns filed?
On the FTA EmaraTax portal.