Staying compliant
VAT registration and returns
Threshold assessment, registration and quarterly filing
In short
VAT applies at 5 per cent. Registration is mandatory once taxable supplies exceed AED 375,000 in a rolling twelve month period, and voluntary from AED 187,500. Many DIFC firms export services that are zero rated, which still requires registration and careful documentation.
What you get
- Threshold monitoring and registration timing advice
- FTA VAT registration
- Place of supply and zero rating analysis for exported services
- Tax group formation where a group structure benefits
- Quarterly return preparation and filing
Timeline: Registration 2 to 4 weeks. Returns quarterly
Zero rated is not the same as out of scope
A DIFC consultancy invoicing clients outside the UAE may be making zero rated supplies rather than supplies outside the scope of VAT. The distinction matters because zero rated supplies count towards the registration threshold and have to be reported, while genuinely out of scope supplies do not.
Firms that assume their export revenue is invisible for VAT purposes often discover they should have registered eighteen months earlier.
Questions
Is the DIFC a VAT free zone?
No. The DIFC is not a designated zone for VAT purposes in the way certain goods-handling free zones are. Normal VAT rules apply to DIFC entities.
Do I have to register if all my clients are overseas?
Very possibly. Exported services are typically zero rated rather than outside the scope, and zero rated supplies count towards the registration threshold. The analysis depends on where the service is used and enjoyed.
Not sure which DIFC licence you need?
Answer eight questions and we will tell you the licence route, the likely cost and the realistic timeline. It takes about two minutes and there is no obligation.