Taxes and e-invoicing in United Arab Emirates: a practical guide | Hesabat

The UAE applies VAT at 5% on most goods and services, administered by the Federal Tax Authority. A federal corporate tax applies to profits, with rates that vary by income level, alongside periodic filing obligations. The UAE is moving toward a phased e-invoicing rollout under official decisions from the Ministry of Finance and the Federal Tax Authority, with taxpayer categories and staged timelines for each. Follow the official timeline from the Ministry of Finance and the authority; do not treat it as a completed general mandate yet.

Key points

• A clear tax picture Know the tax type, its rate and how it is calculated on each invoice.
• Organised invoices Issue, number and archive invoices electronically for easy reference.
• Ready-made reports Period tax reports drawn from the same data, with no manual gathering.
• Digitisation impact Move from paper invoices to a digital cycle linked to your ledger.

Common challenges

• Relying on scattered invoices makes period tax totals hard to assemble.
• Paper invoices are easily lost and hard to archive and reconcile.
• Hard to see each invoice's status and the amounts due or paid.
• The tax impact on results is unclear before the period closes.

How the software helps

• Prepare the tax invoice The invoice is prepared with the required tax fields inside the system in United Arab Emirates.
• Automatic tax calculation Tax is calculated per line and totalled at invoice and report level.
• Invoice lifecycle Track statuses: draft, issued, paid or cancelled, with the reason for each.
• Linked to accounting Every invoice posts an entry and updates customer and inventory balances automatically.
• Archive and search A searchable invoice archive by customer, amount, date and tax number.

Frequently asked questions

What is the VAT situation in United Arab Emirates?

The UAE applies VAT at 5% on most goods and services, administered by the Federal Tax Authority.

Is electronic issuance mandatory?

The UAE is moving toward a phased e-invoicing rollout under official decisions from the Ministry of Finance and the Federal Tax Authority, with taxpayer categories and staged timelines for each. Follow the official timeline from the Ministry of Finance and the authority; do not treat it as a completed general mandate yet.

What is the entry price in this market?

The Starter plan begins at 199 UAE dirham per month in United Arab Emirates, with a 14-day trial.