Understand Key UAE VAT Terms Here

Following are the key terms used in UAE VAT to explain various phrases used in the VAT Degree Law and VAT Executive Regulations.

Term Definition
Concerned goods Goods that have been imported, and would not be exempt if supplied in the UAE
Concerned services Services that have been imported, where the place of supply is in the UAE, and which would not be exempt if supplied in the UAE
Consideration Anything received or expected to be received for a supply, whether in money or other acceptable forms of payment
Exempt supply A supply of goods or services for consideration in the course of conducting business in the UAE, where no VAT is due. No input tax may be recovered in respect of an exempt supply, unless expressly allowed in the VAT legislation
Fixed establishment Any fixed place of business, other than the place of establishment, in which the person conducts his business regularly or permanently and where sufficient human and technology resources exist to enable the person to supply or to acquire goods or services, including the person’s branches
FTA Federal Tax Authority
GCC States All countries that are full members of the Cooperation Council for the Arab States of the Gulf pursuant to its Charter
Goods Physical property that can be supplied, including real estate, water, and all forms of energy
Import The arrival of goods from abroad into the UAE or receipt of services from outside the UAE
Implementing States The GCC States that have implemented a value added tax as per the provisions of the Common VAT Agreement of the States of the Gulf Cooperation Council
Input tax VAT paid by, or due from, a person when goods or services are supplied to the person. Also includes VAT paid on imports
Mandatory Registration Threshold AED 375,000. Where the value of relevant supplies or imports of a person exceeds this threshold, the person must apply for VAT registration
Non-resident Any person who does not own a place of establishment or fixed establishment in the UAE and usually does not reside in the UAE
Output tax VAT charged on a taxable supply and any supply treated as a taxable supply
Payable Tax Tax that has become due for payment to the FTA
Place of residence The place where a person has a place of establishment or fixed establishment, in accordance with the provisions of the Decree-Law
Related parties Two or more persons who are not separated on an economic, financial or regulatory level, where one can control the others either by law, or through the acquisition of shares or voting rights
Refundable Tax Amounts that have been paid and that the Authority can refund in whole or in part to the taxable person; or amounts which the Authority can use for payment of amounts due or administrative penalties; or amounts which the Authority may require the taxable person to carry forward to future tax periods depending on the nature of the refund according to the Tax Law
Services Anything that can be supplied other than goods
Tax Assessment A decision issued by the FTA relating to payable tax or refundable tax
Taxable Person Any person registered or obligated to register for VAT
Taxable supply A supply of goods or services for consideration by a person in the course of conducting business in the UAE. It does not include exempt supplies
Taxpayer Any person obligated to pay tax in the UAE, irrespective of whether they are a taxable person or end-consumer
TRN A unique tax registration number issued by the FTA for a person registered for tax in the UAE
UAE United Arab Emirates
Value Added Tax (VAT) A tax imposed on the import and supply of goods or services, and includes deemed supplies
Tax period A specific period of time for which the payable tax has to be calculated and paid
Tax return Information and data specified for tax purposes and submitted by a taxable person in form determined by the FTA
Voluntary Disclosure A form prepared by the FTA where the taxpayer notifies the FTA of any errors or omissions relating to tax returns, tax assessments or tax refund applications
Voluntary Registration Threshold AED 187,500. Where the value of relevant supplies or taxable expenses of a person exceeds this threshold, the person may apply for VAT registration
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