Sales Tax & VAT News Across the UAE and GCC
A roundup of VAT and sales-tax developments in the UAE and wider GCC — rate changes, registration thresholds, exempt supplies, and the compliance updates that affect SMEs and freelancers.
The UAE's VAT rate has been 5% since 2018, the same standard rate across all four implementing GCC states. There have been no rate changes in 2026, but the compliance environment has continued to tighten. Here is what businesses need to track.
VAT registration — still mandatory at AED 375k
The mandatory VAT registration threshold remains AED 375,000 in the UAE. Voluntary registration is available for businesses below this threshold. The FTA has maintained these thresholds since 2018. Businesses approaching the threshold should monitor their year-to-date revenue and plan for mandatory registration if they are close.
Input tax recovery — common pain points
The most common input tax errors Hisabi sees are: claiming input tax on-exempt supplies (not allowed), missing valid tax invoices as supporting documents, and input tax claims on entertainment expenses (partially disallowed under UAE VAT rules). Finance teams should review their input tax recovery process annually.
GCC — Oman expands scope, Bahrain steady
Oman's VAT implementation has been progressive — currently in the voluntary phase, with mandatory registration approaching. Businesses with Omani operations should confirm their registration status. Bahrain has maintained a stable VAT regime since implementation.
What to review this quarter
- Check if you are approaching the AED 375,000 registration threshold.
- Review all supplier invoices — confirm they are from VAT-registered suppliers and contain valid TRN.
- Ensure zero-rated and exempt supplies are correctly categorised in your records.
- Confirm your VAT return cycle is correct (quarterly or monthly based on liability thresholds).