How to Register for UAE VAT as a Free Zone Company 2026
UAE VAT (Value Added Tax) applies at 5% on most goods and services supplied in UAE. Free zone companies may or may not need to register. Here is the complete 2026 guide.
In this guide:
Does My UAE Free Zone Company Need to Register for VAT?
UAE VAT registration is MANDATORY if your taxable supplies exceed AED 375,000 in any 12-month period. Voluntary registration is available from AED 187,500.
What Are Taxable Supplies for a Free Zone Company?
- Sales of goods in UAE: Taxable at 5%
- Services provided to UAE residents/businesses: Taxable at 5%
- Exports of goods from UAE: Zero-rated (0%)
- International services (B2B services outside UAE): Generally zero-rated
- Designated Zone supplies: Complex rules; goods moving between designated zones may be outside the scope of VAT
Special VAT Rules for UAE Free Zones
Some UAE free zones are “Designated Zones” for VAT purposes:
- JAFZA, DAFZA, DAFZ, Abu Dhabi Airport Free Zone, and several others are Designated Zones
- Goods transferred between Designated Zones without entering UAE are outside the scope of VAT
- Services between Designated Zone companies are NOT automatically outside VAT scope — services have different rules
UAE VAT Registration Process
- Create an EmaraTax account (UAE Federal Tax Authority online portal)
- Submit VAT registration application with company details and expected turnover
- FTA reviews and issues VAT registration certificate (typically 5-20 business days)
- Start collecting 5% VAT on your UAE taxable supplies from the effective date
- File VAT returns quarterly (or monthly for large businesses)
VAT Penalties for Non-Compliance
- Late registration fine: AED 20,000
- Late VAT return filing: AED 1,000 (first offence) to AED 2,000 (repeat)
- Late VAT payment: 2-4% per month of unpaid tax
- Incorrect return: AED 3,000 minimum