Value Added Tax (VAT) was introduced in the UAE on 1 January 2018 with a rate of VAT 5%. The VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. UAE imposes VAT on tax registered businesses on a taxable supply of goods or services at each step of the supply chain. VAT registered businesses collect the amount on behalf of the government; consumers bear the VAT in the form of a 5% increase in the cost of taxable goods and services they purchase in the UAE. A business in UAE must register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000/-. Furthermore, a business may choose to register for VAT voluntarily where the total value of its taxable supplies and imports (or taxable expenses) is in excess of the voluntary registration threshold of AED 187,500. The UAE cabinet has defined some of the free trade zones as designated zones. These are treated as ‘outside the UAE’ for tax purposes. The movement of goods / services within and between these zones is tax-free. At the end of each tax period, VAT registered businesses or the ‘taxable persons’ must submit a VAT return to the Federal Tax Authority