UAE (RAKEZ Free Zone) VAT/GST at a glance
UAE (RAKEZ Free Zone) levies VAT/GST at a standard rate of 5%. Any Free Zone LLC that meets the registration threshold — or that voluntarily registers — must charge tax on taxable supplies, file returns on schedule, and remit the tax to UAE (RAKEZ Free Zone)'s tax authority.
Who must register
- Resident companies: required once turnover exceeds the local registration threshold (typically the equivalent of $30,000–$100,000 in annual taxable supplies; varies by country).
- Non-resident sellers: increasingly required from the first cross-border B2C sale (digital services, marketplace sales). Many jurisdictions follow the EU/OECD digital-services rules.
- Voluntary registration: useful when most customers are VAT-registered businesses (you can reclaim input VAT on expenses).
Registration process
- Confirm threshold status. Track 12-month rolling turnover. Many countries deem registration mandatory from the moment the threshold is crossed.
- Gather documents: certificate of incorporation, tax ID, director ID, proof of UAE (RAKEZ Free Zone) address, sample invoices, business activity description.
- File the VAT/GST application with UAE (RAKEZ Free Zone)'s tax authority. Most jurisdictions now accept online applications.
- Receive your VAT/GST number. Timelines range from 1 week (Singapore, UK) to 8+ weeks (some EU members).
- Configure invoicing: tax number on every invoice, correct rate applied, reverse-charge wording for cross-border B2B.
Rates and treatment
| Supply type | Typical treatment |
|---|---|
| Domestic B2C sale | 5% added to invoice |
| Domestic B2B sale (registered buyer) | 5% added, buyer reclaims as input tax |
| Export of goods outside UAE (RAKEZ Free Zone) | Zero-rated (0%) — recoverable input VAT |
| Export of services to non-resident customer | Usually zero-rated; check place-of-supply rules |
| Digital services sold cross-border to consumers | VAT applies at consumer's country of residence — often requires foreign VAT registration |
Returns frequency and deadlines
Most jurisdictions require monthly or quarterly returns plus an annual reconciliation. Late filing typically triggers automatic penalties (often a fixed minimum plus interest). Set a calendar reminder; many tax authorities now auto-debit late penalties from registered bank accounts.
Common mistakes
- Issuing invoices without the VAT/GST number once registered — buyer cannot reclaim input tax, and you can be fined.
- Applying the wrong rate to digital services (often 0% domestically vs reduced or full rate cross-border).
- Missing the registration trigger by tracking turnover on an inconsistent calendar.
- For non-residents: not registering for UAE (RAKEZ Free Zone) VAT when local marketplace rules require it (Amazon, Etsy, Apple, Google often disclose seller obligations).
For company-wide compliance overview, see UAE (RAKEZ Free Zone) accounting requirements. To compare with US sales tax obligations, use our sales tax nexus calculator.
Authoritative source
UAE (RAKEZ Free Zone) official business registry / authorityLast verified: 2026-05-15