TaxSavvyAE

Exports only and VAT registration

We only export goods. Can we avoid VAT registration?

The situation

A business making only zero-rated supplies can ask the FTA for an exception from registration. If granted, it does not charge VAT but also cannot recover input VAT.

The law

  • Art 15, Federal Decree-Law 8 of 2017: Exception from registration for zero-rated suppliers
  • Art 45, Federal Decree-Law 8 of 2017: Exports of goods are zero-rated when conditions are met

What it means for you

Exporters often prefer registering because zero-rated sales let them recover input VAT, and refunds may follow. Example: an exporter with AED 2 million of exports and AED 80,000 of input VAT on costs would lose that AED 80,000 under an exception. Keep export evidence such as exit customs documents either way.

What to do

  1. Check all supplies are zero-rated.
  2. Estimate input VAT you would lose.
  3. Choose registration or exception.
  4. Keep export evidence for every shipment.

We can do this for youVAT registration on EmaraTax: threshold test, voluntary registration, non-residents and tax groups: AED 950

Related