Do I Need to File VAT or Corporate Tax If My UAE License Is for Visa Only?

If you have a Dubai mainland or UAE free zone business license but are only using it for visa purposes, and you’re not actually running a business or earning any income, then in most cases you don’t need to file VAT or corporate tax returns. But there are a few important details to be aware of.

VAT (Value Added Tax)

You are only required to register for VAT if your taxable sales or imports go over AED 375,000 in the last 12 months or are expected to do so in the next 30 days. If you are not making any sales and your business is inactive, you do not need to register. However, if you already registered for VAT, even voluntarily, you must keep submitting VAT returns on time, even if you had no activity. If you’re not planning to use the license for business, it’s important to cancel the VAT registration properly to avoid penalties.

Corporate Tax

All UAE business license holders, whether in Dubai mainland or a free zone, are required to register and file for corporate tax. Even if the license is not being used for active business and is only held for visa purposes, the company must still submit a corporate tax return. In this case, since there is no income, the company must file a declaration confirming that no business activity took place. This step is necessary to remain compliant with the Federal Tax Authority and avoid penalties.