Free zone company and VAT registration
My free zone consulting company has AED 500,000 of sales. Does it need VAT?
The situation
Yes. Free zone companies follow the same registration threshold. Services from a free zone are taxable like mainland services.
The law
- Art 13, Federal Decree-Law 8 of 2017: Mandatory registration above AED 375,000 in 12 months or expected within 30 days
What it means for you
Example: AED 500,000 of consulting fees to UAE clients in 12 months is above AED 375,000, so registration is mandatory. Fees to clients abroad can be zero-rated if conditions are met, but they still count towards the threshold as taxable supplies.
What to do
- Run the threshold test.
- Register on EmaraTax.
- Charge 5 percent to UAE clients.
- Zero-rate qualifying exports with evidence.
We can do this for youVAT registration on EmaraTax: threshold test, voluntary registration, non-residents and tax groups: AED 950