10 Common VAT Mistakes UAE Businesses Make

By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03

Most VAT penalties come from a handful of recurring mistakes rather than deliberate avoidance. Here are the ones we see most, so you can check your own process against them.

• Registering late — missing the AED 375,000 threshold deadline and the AED 10,000 penalty that follows
• Charging VAT without a TRN — collecting VAT before registration is approved
• Forgetting the reverse charge on imported goods and services
• Claiming blocked input VAT on entertainment and personal-use vehicles
• Reporting sales under the wrong emirate on the return
• Confusing zero-rated and exempt supplies, and over-recovering input VAT
• Issuing non-compliant tax invoices missing the required details
• Filing from unreconciled records that do not match the accounts
• Missing the filing or payment deadline of the 28th
• Not keeping records for the required five years

How to avoid them

Most of these disappear with reconciled monthly bookkeeping, a correct chart of accounts with the right VAT codes, and a review before each return is filed. A periodic VAT health check catches anything that slips through while you can still correct it cheaply via a voluntary disclosure.

Frequently asked questions

What is the most common VAT mistake?

Registering late and forgetting the reverse charge on imported services are the two we see most often.

How can I avoid VAT penalties?

Reconcile your records monthly, file on time, and run a periodic VAT health check to catch errors before the FTA does.

Can I fix a past VAT error?

Yes, through a voluntary disclosure, which usually means lower penalties than an error found on audit.

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