Standard-rated supplies in the UAE

What are standard-rated supplies?

Standard-rated supplies are supplies that are subject to VAT at 5%. This VAT charge is applied to all supplies traded within the UAE in which the supplier and the customer are both inside the UAE, except for the categories of supplies that are explicitly listed as exempt or zero-rated.

What categories of goods and services are included in the standard-rated supplies?

Standard-rated sales: Supplies of goods and services that are subject to a 5% VAT should be reported at an Emirate level. You should mention the net value of supplies and the output VAT levied.

Discounted rate of standard-rated supplies: After reducing the discount value, you should record the taxable value. For example, an original supply of 100 AED discounted at 10%, will amount to 90 AED. Its taxable value at 5% VAT will be 4.5 AED.

Advanced received: Report 5% of the total received advance as the VAT amount and the remaining amount will be the original amount of the goods sold. For example, if you’ve received an advance of 1,050 AED, report 1,000 AED as the amount and 50 AED as the VAT amount.

Credit note: Reduce the value of the credit note from your standard-rated supplies and report only the net amount.

Vending machine sales: Report these goods under the standard-rated supplies. You should report the applied 5% VAT in the tax return period in which the funds have been collected from the vending machine.

Deemed supplies: You should report business assets that are put to private use or considered as gifts, and account for their Output VAT.

Supplies under the profit margin scheme: You should report the full value of the goods sold under the profit margin scheme and deduct the VAT value calculated on the margin.

Supplies from a non-resident person: If the recipient of the goods and services is not registered in the UAE and is receiving supplies from a non-resident supplier, he/she is required to register for VAT in the UAE.

Designated zone supplies that are consumed in a designated zone: A VAT of 5% should be applied to the supply of goods within the designated zone that are consumed in the designated zone.

Sales of commercial properties: As a supplier of taxable commercial properties in the UAE, you should report output tax and include output tax as an adjustment if the buyer has already paid the output tax to the Authority.

Corrected errors from the previous tax period: If the error does not exceed 10,000 AED, you can correct errors from the previous tax period in your current return period. Add the adjustment to the previous values and show only the net standard-rated supplies and output. If the error exceeds 10,000 AED, you are required to submit a voluntary disclosure in the Tax period in which the error occurred.

Sales of business assets: These sales should be considered as standard-rated supplies.