Shuraa Tax Blog

Category: VAT Services

  • VAT on Courier Services in the UAE

    VAT on Courier Services in the UAE

    In 2018, the UAE introduced Value-Added Tax (VAT), which is a 5% tax added to most goods and services sold in the country. This includes VAT on courier services, which are an important part of the UAE’s economy. With so many businesses relying on fast and reliable delivery services, understanding how VAT affects courier services is important for both businesses and individuals.

    Courier services play a key role in the UAE, helping businesses deliver packages to customers locally and around the world. Whether you’re running an e-commerce business or sending packages across the UAE, knowing how VAT is applied to these services can help you avoid surprises and stay compliant with the law.

    So, let’s break down everything you need to know about VAT on courier services in the UAE.

    Is VAT Applicable to Courier Services In UAE?

    Yes, VAT on courier services in the UAE is typically applied at the standard rate of 5%. Whether you’re using local delivery or sending packages internationally, most courier companies must register for VAT and charge their customers accordingly. However, the way VAT is applied varies for domestic vs. international services.

    Domestic vs. International Courier Services VAT in UAE

    Domestic Courier Services:

    For domestic courier services in the UAE, a 5% VAT is charged to both individuals and businesses. For example, if you’re sending a package from Dubai to Abu Dhabi, the courier company adds 5% VAT to the delivery fee, ensuring that the tax is properly applied.

    International Courier Services:

    For international courier services in the UAE, the VAT rate is usually zero-rated (0%). Although these services are subject to VAT, no VAT is collected from the customer. This applies when shipping from the UAE to countries like the USA, making international shipments more cost-effective for businesses and consumers.

    VAT Exemptions for Courier Services

    In the case of international courier services, while they are zero-rated, they are not fully exempt from VAT. A zero-rated service still requires the courier company to report the transaction for VAT purposes, even though no VAT is charged to the customer. 

    Most courier services, whether domestic or international, are not fully exempt from VAT. International services may qualify for the zero-rated VAT (0%), but they still need to be reported for VAT purposes, while domestic services are taxed at the standard 5%.

    How is VAT on Courier Services Calculated?

    To calculate VAT on courier services in the UAE, simply add 5% to the delivery fee for domestic shipments. For example, if a courier charges AED 200, an additional AED 10 (5%) VAT is applied, bringing the total to AED 210.

    For international deliveries, since the service is zero-rated, no VAT is added to the courier fees. For international shipments, no VAT is added to the courier fee, so if the charge is AED 300, you pay exactly that amount, with no extra taxes.

    VAT Registration for Courier Services

    Courier service providers must register for VAT if their annual turnover exceeds AED 375,000. Providers earning less than this amount can voluntarily register if their turnover exceeds AED 187,500. Once registered, couriers must charge VAT on eligible services and file regular returns with the Federal Tax Authority (FTA).

    VAT Registration Process:

    1. Courier service providers must apply for VAT registration through the Federal Tax Authority (FTA) portal.

    2. The business will need to provide details such as:

    • Company trade license.
    • Financial records showing turnover.
    • Details of the business activities.

    3. Once registered, the business will receive a VAT registration number (TRN), which must be included on all VAT invoices issued to customers.

    Failure to register for VAT when required can result in significant penalties. The FTA can impose fines for late registration, failure to charge VAT correctly, or not filing VAT returns on time.

    Input Tax Credits for Courier Service Providers

    Courier service providers in the UAE can claim input tax credits on VAT paid for business expenses related to their services. These include VAT incurred on fuel, vehicles, packaging materials, and other operational costs.

    By claiming input tax credits, courier companies can reduce their VAT liability, allowing them to deduct the VAT paid on these expenses from the VAT collected from customers.

    VAT on Imported Goods via Courier

    When importing goods into the UAE, VAT is charged on the value of the items, including any customs duties. The courier company typically collects the VAT and remits it to the FTA, ensuring compliance with UAE tax regulations.

    However, there may be specific exemptions or reduced VAT rates for certain types of imported goods, depending on their classification and intended use. It’s important to consult with a VAT experts such as Shuraa Tax to determine the correct VAT treatment for imported goods.

    VAT on Goods Shipped Within the UAE

    For goods shipped within the UAE, VAT is applied both to the value of the goods and the delivery service if the courier company is VAT-registered. The VAT treatment depends on whether the transaction is business-to-business (B2B) or business-to-consumer (B2C):

    • B2B Transactions: In B2B transactions, the supplier of the goods is generally responsible for accounting for VAT on the sale of the goods. The courier service provider is not typically required to collect or remit VAT on the value of the goods themselves.
    • B2C Transactions: In B2C transactions, the courier service provider is usually responsible for collecting and remitting VAT on the value of the goods, in addition to the delivery fee.

    Taxes Applicable to Delivery Services in the UAE

    When running a delivery service in the UAE, you may be subject to the following taxes:

    1. Value-Added Tax (VAT)

    The UAE charges 5% VAT on most goods and services, including domestic courier services, while international shipments are zero-rated for VAT purposes.

    2. Customs Duties

    Duties apply to goods entering the UAE, typically between 5% and 10%. Couriers may help facilitate customs payments.

    3. Corporate Tax

    A 9% corporate tax is levied on profits exceeding AED 375,000. Profits below this threshold are not taxed.

    4. Excise Tax (If Applicable)

    If your delivery service involves the transport of excise goods like tobacco, sugary drinks, or energy drinks, excise tax will apply.

    5. Social Security and Insurance Contributions

    While the UAE doesn’t have traditional social security taxes, delivery service businesses must ensure their employees have health insurance, which is mandatory under UAE law.

    Need Help with VAT on Courier Services? Contact Shuraa Tax Today!

    Staying VAT-compliant is crucial for businesses using courier services in the UAE. If you need assistance navigating VAT regulations or have questions about how VAT impacts your business, reach out to Shuraa Tax today! We’ll help ensure you’re fully compliant with all VAT requirements.

    If you find all this a bit overwhelming, you’re not alone! Getting professional advice is a smart move. At Shuraa Tax, we offer a range of tax services to help your business meet all VAT requirements easily.

    Don’t hesitate to reach out to us today at +971508912062 or info@shuraatax.com and see how we can support you.

    Frequently Asked Questions

    1. How does VAT apply to courier services in the UAE?

    VAT is applicable to courier services in the UAE at a standard rate of 5% for domestic shipments. For international courier services, the transportation of goods is typically zero-rated, meaning no VAT is charged.

    2. What VAT rate applies to importing and exporting goods?

    When importing goods into the UAE, a 5% VAT is generally applicable, along with any customs duties. For exported goods, the VAT rate is zero-rated, meaning that no VAT is charged when goods leave the UAE.

    3. How does VAT apply to e-commerce businesses using courier services?

    E-commerce businesses that use courier services are responsible for charging 5% VAT on domestic shipments. For international deliveries, VAT is typically zero-rated.

    4. What are the record-keeping requirements for courier service providers in the UAE?

    Courier service providers in the UAE are required to maintain detailed records of their VAT transactions, including invoices, receipts, and payment records. These records should be kept for a period of five years from the end of the tax period in which the transaction occurred.

  • Top VAT Consultants in Abu Dhabi (2026)

    Top VAT Consultants in Abu Dhabi (2026)

    The Federal Tax Authority (FTA) gathers and manages taxes. It furnishes comprehensive laws, guidance, and explanations to aid commercial entities. The UAE government presented Tax (VAT) on January 1st, 2018. VAT consultants in Abu Dhabi constitutes an indirect tax imposed on the utilisation of products and services, knowingly influencing business operations. The keen risk, quantity, and difficulty of transactions must be better for taxpayers to fulfil tax compliance obligations.

    Since the inception of VAT in the UAE, Shuraa Tax has remained committed to delivering committed professional assistance to taxpayers. Our services include supporting businesses in their transactions, guaranteeing correct tax procedures, and undertaking conflicts. In this blog post, we aim to point you towards the leading VAT consultants in Abu Dhabi for 2026.

    How do Abu Dhabi’s VAT consultants assist businesses?

    VAT consultants are crucial partners for businesses directing the involved landscape of Value Added Tax regulations. These professionals offer services to safeguard compliance, provide expert advice, and optimise VAT-related processes. From assisting with initial registration and filing VAT returns to providing direction on complex transactions and pricing strategies, VAT consultants play a key role in helping businesses understand and manage their VAT obligations effectively. They provide custom-made solutions to ease risks, implement internal controls, and develop VAT strategies that align with the unique needs of each business.

    Moreover, VAT consultants keep well-informed of changes in VAT laws and regulations, guaranteeing that companies stay informed and adapt to growing requirements seamlessly. With their skill, businesses can confidently steer the difficulties of VAT, minimising tax liabilities and maximising compliance.

    Abu Dhabi’s Shuraa VAT Consultant Services

    VAT consulting services in Abu Dhabi boast expertise and exercise in the details of value-added tax in the region. The imposition of VAT on goods and services in Abu Dhabi falls under the jurisdiction of the Federal Tax Authority. In Abu Dhabi, businesses must register for VAT and submit VAT returns once their annual sales surpass AED 375,000. VAT consultants in Abu Dhabi offer a range of services, including:

    • VAT return filing
    • VAT audits
    • VAT consultations
    • Representation services

    Following to VAT regulations necessitates businesses to file monthly returns and furnish an audit report. VAT consultants in Dubai offer complete VAT legislation services.

    Top VAT Consultants in Abu Dhabi

    The foremost VAT consultants in Abu Dhabi include:

    Shuraa Tax

    Shuraa Tax is broadly recognised as a leading authority among VAT Consultant Services in Abu Dhabi, setting the industry’s standard for quality and reliability. With an established track record of excellence, they have established themselves as trusted advisors to numerous businesses across various sectors.

    What sets Shuraa Tax apart is its thorough understanding of the details of VAT law and its proactive approach towards helping businesses steer the difficulties of agreement. By staying well-informed of the latest developments and updates in VAT regulations, they guarantee that their clients are always well-informed and prepared to meet their legal obligations.

    Shuraa Tax is more than just a service provider; it is a trusted partner committed to empowering businesses to flourish in an ever-evolving regulatory landscape. With their firm dedication to excellence and client satisfaction, it’s no wonder they are consistently ranked among the top VAT consultants in Abu Dhabi.

    Deloitte & Touche

    Deloitte’s VAT consultants stand out for their deep understanding of the complex tones of VAT law. They possess a complete grasp of the legal framework and an acute awareness of the broader industry dynamics. By combining legal expertise with industry insight, they are uniquely positioned to offer custom-made solutions that address the specific needs and challenges businesses in Abu Dhabi face. Moreover, Deloitte’s VAT consultants recognise the growing importance of technology in determining the landscape of tax compliance.

    They leverage cutting-edge tools and methodologies to streamline processes, improve accuracy, and guarantee compliance with evolving regulatory requirements. This forward-thinking approach enables them to stay ahead of the curve and provide clients with innovative solutions that drive efficiency and effectiveness.

    In addition to their technical proficiency, Deloitte’s VAT consultants are known for their competence and professionalism. With a proven track record of bringing results, they see confidence in their clients and inspire trust through their dedication to excellence. As trusted advisors, they go above and beyond to provide personalised service and strategic leadership that helps businesses quickly steer the complexities of VAT compliance.

    KPMG

    KPMG, well-known as one of the top VAT consultants in Abu Dhabi, differentiates itself through its proactive leadership and meticulous execution in ensuring compliance with VAT regulations. Their approach goes beyond mere advisory services; they take the reins in supervisory businesses through the complexities of VAT compliance, offering comprehensive support at every stage of the process.

    By leveraging their extensive expertise and resources, KPMG assists businesses in steering the complicated web of VAT laws and regulations, thereby minimising the risk of legal issues arising from non-compliance. Their thorough understanding of the legal landscape allows them to identify and proactively address potential pitfalls, safeguarding businesses against costly penalties and disputes.

    In essence, KPMG’s role as a top VAT consultant in Abu Dhabi extends beyond mere compliance; they serve as strategic partners dedicated to supporting businesses in achieving their objectives while minimising risks and maximising opportunities in VAT. Their proactive approach and solid commitment to excellence make them a trusted ally for businesses seeking to direct the intricate landscape of VAT regulations with confidence and peace of mind.

    PricewaterhouseCoopers

    PricewaterhouseCoopers (PwC) stands at the forefront of driving change in tax laws, leveraging its significant influence to engage in discussions with tax officials and governments actively. Their proactive approach towards shaping tax legislation reflects their deep commitment to serving as thought leaders and catalysts for positive change in the tax landscape.

    PwC’s expertise in tax matters extends far beyond mere compliance; they possess an in-depth understanding of the intricacies of tax laws and regulations, allowing them to offer strategic insights and direction to their clients. By staying well-informed of the latest developments and trends in tax policy, PwC can anticipate changes and provide timely advice to help businesses adapt and thrive in an ever-developing regulatory environment.

     In essence, PwC’s proactive approach, coupled with its unmatched expertise and influence in the field of tax, makes it a trusted partner for businesses seeking to direct the intricacies of VAT compliance and taxation in Abu Dhabi. By easing up their insights and resources, PwC helps companies stay ahead of the curve and achieve their strategic objectives in a rapidly changing regulatory landscape.

    Ernst & Young

    Ernst & Young (EY), recognised as one of the foremost VAT consultants in Abu Dhabi, distinguishes itself through its innovative approach to VAT compliance. EY goes beyond traditional advisory services by leveraging cutting-edge practices and technologies to help clients transform legal compliance into a strategic advantage.

    EY’s innovative practices are designed to ensure adherence to VAT regulations and reveal hidden value within businesses. By adopting a forward-thinking mindset, EY helps clients identify opportunities to optimise their VAT strategies and improve overall business performance.

    EY’s commitment to innovation and client-centric approach sets them apart as a trusted advisor in VAT consultancy. By harnessing the power of innovative practices, EY enables clients to meet their legal obligations and seize opportunities for growth and innovation in an ever-changing business landscape.

    Reasons to Engage VAT Consultant Services in Abu Dhabi:

    • Employing top-tier methodologies for precise VAT calculations.
    • Making bespoke consulting solutions tailored to clients’ specific requirements.
    • Representative professionalism and proficiency in directing VAT regulations.
    • Conducting thorough reviews to assess the effects of VAT implementation on businesses.
    • Scrutinising business operations to ensure compliance with VAT regulations in Dubai, UAE.
    • Provided support during VAT audits and represented clients in dealings with VAT officials.
    • Supervising clients through VAT processes to streamline operations and ensure compliance with ease.

    Services Offered by Shuraa Tax VAT Consultants

    Below is the list of services that Shuraa Tax offers:

    1. VAT Advisory Services

    Providing tailored advisory services to address industry-specific needs, offering guidance on transactions and their tax implications. 

    2. VAT Return Filing Service

    Supporting UAE businesses in completing and filing VAT Return Form 201, including direction on reconciliation input and output VAT and computing tax liability. Leading reviews of previously submitted VAT returns to identify and rectify errors or omissions.

    3. VAT Registration

    We assist businesses in the VAT registration process, ensure compliance with regulations, and facilitate a smooth transition into the tax system.

    4. VAT Deregistration

    Supporting businesses in applying for VAT deregistration within the required timeframe to avoid potential penalties. Ensuring a seamless process for cancelling tax registration numbers.

    5. VAT Training

    Presenting customised training sessions for individuals and corporate entities on VAT laws and regulations. Leveraging the expertise of our professionals to provide complete training custom-made to specific business needs.

    6. VAT Transactions Advisory

    Providing guidance on industry-specific transactions, particularly for businesses with complex operations, products, or branches. Keeping abreast of recent developments to offer informed advice on VAT matters.

    Concluding Thoughts with Shuraa Tax

    This overview of leading VAT consultants has assisted you in determining the ideal VAT consultancy for your needs. For further insights into VAT consultancy or any tax and accounting inquiries, please don’t hesitate to contact us. Reach out today at +971508912062 or via email at info@shuraatax.com. We look forward to assisting you!

    Frequently Asked Questions

    Q1. What taxes apply to companies in Abu Dhabi?

    In Abu Dhabi, Value Added Tax (VAT) applies to most goods and services, while excise tax is levied on specific goods. Individual income tax is not imposed, but oil companies and foreign banks are subject to corporate tax.

    Q2. What services do tax consultants offer in Abu Dhabi?

    Tax consultants, well-versed in tax laws, act as advisors to clients, aiding in tax planning, compliance, and reporting.

    Q3. What factors should be considered when hiring a tax consultant? 

    When selecting a tax consultant, measuring their expertise in the relevant tax laws, cost-effectiveness, and industry-specific knowledge relevant to the business activities is essential.

    Q4. What are the key features of a tax accounting application?

    Choosing a tax accounting application hinges on ensuring compliance with applicable tax laws and enhancing efficiency in tax processes.

  • VAT on Transportation Services in UAE

    VAT on Transportation Services in UAE

    As you may know, VAT is a consumption tax that is levied on goods and services at each stage of production and distribution. It is an important source of revenue for governments around the world, including the UAE. Within the framework, the significance is particularly important in transportation services. As the UAE continues to evolve economically, understanding the complexities of VAT on transportation services in UAE becomes essential for businesses operating in this sector.

    But fear not, we’ll break down the essentials of transportation VAT in UAE in a way that’s clear and easy to digest, so you can keep your finances on track and enjoy your journeys without any bumps in the road.

    What is VAT in the UAE?

    Value Added Tax (VAT) was introduced in the UAE on January 1st, 2018, as a new source of government revenue and diversification from oil dependence. It’s a consumption tax levied at each stage of the supply chain, ultimately borne by the final consumer. 

    The standard VAT rate in the UAE is 5%. This applies to most goods and services, with some exceptions. 

    Businesses whose taxable supplies and imports exceed AED 375,000 in the last 12 months are mandatory to register for VAT. Voluntary registration is possible for businesses exceeding AED 187,500. 

    Registered businesses must file VAT returns electronically every tax period (usually monthly or quarterly). 

    Applicability of VAT on Different Goods and Services in UAE

    • Standard rate (5%): Applies to most goods and services, including electronics, clothing, restaurants, hotels, and transportation.
    • Zero rate (0%): Applies to specific goods and services, such as exports outside the GCC, international transportation, certain medical and educational services, and the first supply of residential property.
    • Exempt: Certain goods and services are completely exempt from VAT, such as local public transport, basic foodstuffs, and financial services. 

    Role of Federal Tax Authority (FTA)

    The Federal Tax Authority (FTA) is the government agency responsible for administering, collecting, and enforcing federal taxes in the UAE. This includes Value Added Tax (VAT), excise taxes, and corporate income tax.

    The FTA is responsible for administering the VAT system in the UAE. The FTA issues regulations and guidance on VAT compliance and also enforces it through audits and penalties.

    VAT Rates and Exemptions for Transportation Services

    The UAE’s VAT system applies to various sectors, including transportation. However, there are specific rates and exemptions for different types of transportation services, making it crucial to understand the nuances to avoid any compliance issues.

    The standard VAT rate in the UAE is 5%. This applies to most goods and services, including many transportation services.

    However, there are some specific exemptions for VAT on transportation in UAE:

    Domestic passenger transportation

    Any transportation of passengers within the UAE, by land, water, or air, is exempt from VAT. This includes taxis, buses, trains, trams, ferries, and similar modes of transport.

    International transportation

    • International passenger and goods transportation, including intra-GCC (Gulf Cooperation Council) travel, is zero-rated. This means the VAT rate is 0%, but businesses involved must still comply with certain VAT reporting requirements.
    • Supply of means of transport (air, sea, or land) for commercial transport of goods and passengers (over 10 people) is also zero-rated. This includes the leasing or chartering of airplanes, ships, and trucks for commercial use.
    • Goods and services related to these means of transport and to the transportation of goods and passengers are also zero-rated. This could include maintenance and repair services for vehicles used in international transport, catering services for passengers on board, and ground handling services for airplanes.

    Local passenger transport services for pleasure trips

    Not exempt from VAT and are subject to the standard 5% rate. This could apply to tourist cruises or private jet charters within the UAE.

    International passenger transport services by aircraft that constitute “international carriage”

    Not exempt and are subject to the standard 0% rate. This could apply to flights that originate or terminate outside the UAE even if they have a stopover within the country.

    Import of vehicles

    Subject to the standard 5% VAT rate.

    Free zones

    Some free zones in the UAE have special VAT regulations, so it’s important to check the specific rules for the relevant free zone.

    Zero-rating vs. Exemption Transportation VAT in UAE

    The key difference between zero-rating and exemption in the context of VAT on transportation services in the UAE lies in whether the business can claim input tax refunds. 

    Zero-rating

    While there is no actual tax charge, businesses still need to: 

    • Issue proper tax invoices with a 0% VAT rate. 
    • Maintain records of zero-rated supplies. 
    • File VAT returns. 

    Businesses can claim back the VAT paid on expenses incurred while providing zero-rated services. This helps reduce their overall tax burden. 

    Exemption

    No VAT is charged. The transaction is completely outside the scope of VAT.

    Businesses cannot claim back any VAT paid on expenses related to exempt supplies. This can disadvantage businesses with high input costs.

    Transportation VAT Implications for Businesses and Individuals

    The implications of VAT on transportation services in the UAE differ for businesses and individuals, depending on the specific type of service and its treatment under the VAT law. Here are some of the key implications: 

    • Domestic passenger transport, including taxis, buses, and trains, is exempt from VAT. This simplifies compliance for businesses operating in this sector. 
    • Flights, airfares, etc., are subject to the zero-rating benefit, potentially leading to lower costs compared to standard VAT rates. 
    • The zero-rating incentivizes international travel to the UAE, benefiting airlines, hotels, and tourist attractions. 
    • Businesses involved in zero-rated services can claim VAT paid on related expenses, improving cash flow. 
    • Zero-rated transactions still require proper tax invoices, record-keeping, and VAT return filing. 
    • Businesses can choose to absorb the VAT cost, pass it on to customers, or adjust pricing based on specific services. 
    • Some individuals may benefit from claiming input tax refunds on travel expenses related to their business activities. 

    Tax Matters Made Simple with Shuraa

    The introduction of VAT in the UAE has brought a new layer of complexity to the transportation sector. And, as the UAE continues to evolve economically, staying informed about tax regulations becomes not just a choice but a strategic necessity for businesses. 

    In this ever-changing tax landscape, seeking professional guidance becomes essential, and that’s where Shuraa Tax steps in. We, at Shuraa Tax, are more than just a team of knowledgeable and qualified accountants, auditors, and tax advisors in Dubai, UAE. Our mission is to assist businesses in simplifying their taxation and financial management needs. 

    Call us at +971508912062. You can also drop us an email at info@shuraatax.com and get your queries answered in no time. Let’s simplify taxation together!