VAT compliance in the UAE looks simple on paper.
But in reality, many businesses lose money every year because of small errors.

Most penalties don’t happen from fraud.
They happen from misunderstanding.

Let’s look at the most common VAT mistakes — and how to stay safe.

1. Late VAT Registration

Many companies wait too long to register for VAT.

If your taxable turnover crosses the required threshold and you don’t register on time, penalties apply — even if you didn’t know.

Fix: Track revenue regularly and register early.

2. Incorrect VAT Filing

Wrong figures, missing invoices, or calculation errors are very common.

Even a small mistake can trigger audits or fines.

Fix: Keep organized records and review returns before submitting.

3. Claiming VAT You’re Not Eligible For

Not all expenses qualify for VAT recovery.

Common mistakes include:

• Personal expenses
• Certain entertainment costs
• Unsupported receipts

Fix: Always verify what can legally be reclaimed.

4. Poor Record Keeping

UAE law requires proper documentation for several years.

Missing records can lead to heavy penalties during inspections.

Fix: Maintain digital and physical copies of invoices and reports.

5. Ignoring VAT Updates & Rule Changes

VAT laws do change.

What was allowed last year may not be allowed today.

Fix: Work with professionals who stay updated on FTA regulations.