What is the FTA in the UAE and why does it matter to your business

What is FTA UAE?

The FTA UAE, or Federal Tax Authority, is the government body responsible for administering and collecting federal taxes in the United Arab Emirates. Established in 2017 under Federal Decree-Law 13 of 2016, the FTA manages Value Added Tax (VAT), corporate tax, excise tax, and related compliance programs. It operates under the UAE Ministry of Finance (MoF) and serves as the primary point of contact between taxpayers and the federal tax system.

If you run a business in the UAE, the FTA directly affects how you register for taxes, file returns, claim refunds, and stay compliant. This guide covers everything UAE business owners and finance teams need to know about the authority, from its core functions to upcoming e-invoicing requirements. For a broader view of staying compliant, see our FTA compliance UAE hub.

Why the FTA was created

Before 2017, the UAE had no federal tax authority. The country relied on oil revenues and fees. As the government diversified its economy, it introduced federal taxes to build sustainable public finances.

The FTA was created to give businesses a single, transparent agency for tax matters. Its founding coincided with the introduction of excise tax in October 2017 and VAT on January 1, 2018. Since then, the FTA has expanded to cover corporate tax, which took effect for financial years starting on or after June 1, 2023.

Taxes the FTA administers

The FTA oversees three main federal taxes. Each has its own registration thresholds, filing cycles, and penalty rules.

VAT (Value Added Tax)

VAT applies at a standard rate of 5% on most goods and services. It was introduced under Federal Decree-Law 8 of 2017. Businesses with taxable supplies exceeding AED 375,000 in a 12-month period must register. Voluntary registration is available at AED 187,500. VAT returns are due within 28 days of the end of each tax period.

Corporate tax

Corporate tax is governed by Federal Decree-Law 47 of 2022. The rate is 0% on taxable income up to AED 375,000 and 9% on income above that threshold. Large multinationals with global revenue of EUR 750 million or more face a 15% Domestic Minimum Top-up Tax (DMTT) from January 2025. Small business relief applies to businesses with revenue up to AED 3 million through 2026. Corporate tax returns must be filed within 9 months of the financial year end.

Excise tax

Excise tax targets specific goods: tobacco products (100%), carbonated drinks (50%), energy drinks (100%), sweetened drinks (50%), and electronic smoking devices and liquids (100%). Businesses that import, produce, or stockpile excise goods must register with the FTA.

Tax	Legal basis	Standard rate	Mandatory registration threshold	Filing deadline
VAT	Federal Decree-Law 8 of 2017	5%	AED 375,000 taxable supplies	28 days after period end
Corporate tax	Federal Decree-Law 47 of 2022	0% / 9% / 15% DMTT	All taxable persons	9 months after financial year end
Excise tax	Federal Decree-Law 7 of 2017	50% to 100%	All importers, producers, stockpilers	15 days after period end

Core functions of the FTA

The FTA does more than collect taxes. Its mandate covers several areas that affect daily business operations.

Tax registration and deregistration

Every business that meets a registration threshold must apply through the EmaraTax portal. The FTA issues a Tax Registration Number (TRN) upon approval. Businesses that fall below thresholds or cease operations can apply for deregistration.

Tax return processing and audits

The FTA reviews filed returns and conducts audits. It can request supporting documents, visit business premises, and issue assessments. Audits may be triggered by discrepancies, late filings, or random selection. To understand how the authority is organized internally, read about FTA UAE departments and roles.

Refunds

Businesses that pay more VAT on inputs than they collect on outputs can claim refunds. The FTA also processes tourist VAT refunds at retail outlets. Refund requests are submitted through EmaraTax and reviewed against filed returns.

Penalties and enforcement

The FTA enforces compliance through administrative penalties. These range from fixed fines for late registration to percentage-based penalties for unpaid tax. Businesses can object to penalty assessments through the FTA's reconsideration process or escalate to the Tax Disputes Resolution Committee. For the full list of penalty-related rulings, see FTA UAE key decisions.

Public awareness and guidance

The FTA publishes guides, public clarifications, and e-learning modules. It also issues binding rulings on specific tax questions. Businesses can reach the authority through multiple channels, which are detailed in our guide to FTA UAE contact channels.

The FTA and UAE e-invoicing

The FTA plays a central role in the UAE's upcoming e-invoicing mandate. Working alongside the Ministry of Finance, the FTA will receive structured invoice data through the Peppol 5-corner Decentralized Continuous Transaction Control and Exchange (DCTCE) model. The invoice format is PINT AE, a UAE-specific profile built on Universal Business Language (UBL).

Key legal instruments include Federal Decree-Law 16 of 2024 (amending the VAT law) and Federal Decree-Law 17 of 2024 (amending tax procedures), along with Ministerial Decisions 243 and 244 of 2025.

E-invoicing timeline

Phase	Who	Milestone	Deadline
Pilot	Selected businesses	Pilot participation	Q2 2026
Phase 1	Businesses with AED 50M+ revenue	Appoint an Accredited Service Provider (ASP)	October 30, 2026
Phase 1	Businesses with AED 50M+ revenue	Mandatory go-live	January 1, 2027
Phase 2	SMEs (under AED 50M revenue)	Mandatory go-live	July 1, 2027
Phase 3	Government entities	Mandatory go-live	October 1, 2027

Penalties under Cabinet Decision 106 of 2025 range from AED 2,500 to AED 50,000 per violation. Businesses must connect to the e-invoicing network through an ASP listed on the Ministry of Finance's published ASP list.

How to interact with the FTA

Most interactions happen through the EmaraTax digital portal. This is where businesses register, file returns, pay liabilities, request refunds, and respond to audit queries. If you have trouble accessing the portal, our EmaraTax login troubleshooting guide can help.

The FTA also operates a call center, email support, and in-person service centers. Response times and service standards are published in the FTA UAE service charter.

Common mistakes businesses make with the FTA

• Late registration. Businesses that exceed the AED 375,000 VAT threshold have 30 days to apply. Missing this window triggers penalties.
• Incorrect TRN on invoices. Every tax invoice must show a valid TRN. Errors can invalidate input tax claims for your customers.
• Filing after the deadline. VAT returns are due within 28 days. Corporate tax returns within 9 months. Late filing attracts fixed and daily penalties.
• Ignoring FTA notifications. The FTA sends notices through EmaraTax. Failing to respond can escalate a routine query into a formal audit.
• Not preparing for e-invoicing. The 2027 deadlines may seem distant, but appointing an ASP and updating systems takes time.

Staying compliant with the FTA

Compliance is not a one-time task. It requires ongoing attention to filing deadlines, record-keeping rules, and regulatory updates. The FTA expects businesses to maintain records for at least 5 years (7 years for real estate). As the e-invoicing mandate rolls out, businesses will also need to transmit invoice data in real time through the DCTCE network.

Return to our FTA compliance UAE hub for guides on every aspect of staying on the right side of the authority.

If your business needs to prepare for UAE e-invoicing, EInvoice Direct includes an accredited service provider at no extra charge. Get UAE e-invoicing pricing to see how EInvoice Direct works for your setup.