Accounting and VAT for e-commerce businesses in the UAE

Where e-commerce books go wrong

• Recording payouts as sales. Marketplace and gateway payouts are net of commissions, fees, refunds and holds. Sales, fees and VAT must be recorded gross and reconciled to each settlement report.
• Inventory. Stock held in your own store, in a marketplace's fulfilment centre and in transit all needs to be counted and valued, or the cost of sales and profit will be wrong.
• Imports. Import VAT and customs duty need to be captured correctly so input VAT can be recovered through the VAT return.
• Several currencies and channels. Website, marketplace and social-commerce sales need consistent treatment and exchange rates.

VAT points for online sellers

• Sales to UAE customers are generally standard-rated at 5%; exports of goods outside the UAE can generally be zero-rated if the export evidence conditions are met.
• Marketplace commissions and other services from overseas platforms may require VAT under the reverse charge.
• Zero-rated export sales still count towards the AED 375,000 registration threshold.
• From 2027, the UAE's e-invoicing system will apply to business-to-business and business-to-government invoices, so your invoicing set-up should be reviewed — see our e-invoicing guide.

Corporate Tax and the free zone question

Many online sellers are set up in a free zone. Selling to individual consumers is generally not a qualifying activity, so that income is usually non-qualifying — and above the de minimis limit the company loses the 0% rate altogether. We look at your actual sales mix before you rely on the free zone rate.

How we help

• Monthly settlement reconciliations for each marketplace and payment gateway, in Zoho Books (included in your plan).
• Inventory and cost-of-sales tracking, and import VAT captured correctly.
• Quarterly VAT returns, including reverse charge on overseas platform fees.
• Cross-border experience for sellers with overseas suppliers, warehouses or group companies, and support with FTA queries and voluntary disclosures where earlier returns need correcting.

Sources: Federal Decree-Law No. 8 of 2017 on VAT, as amended, and its Executive Regulation; Federal Decree-Law No. 47 of 2022 on Corporate Tax (Article 18); Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023; Ministerial Decision No. 244 of 2025 on the electronic invoicing system, as amended.