How to Pay VAT in the UAE - A Clear Guide for SMEs

Filing your VAT return is only half the job.
The UAE’s VAT system is digital, fast, and strict. If you miss the deadline by even a day, the penalties start immediately.

Why Paying VAT on Time Matters

Every VAT-registered business in the UAE; mainland or free zone; must pay VAT collected on taxable supplies.
Even companies in Designated Zones are not fully exempt; the moment you deal with the mainland or provide taxable services, VAT becomes your responsibility.

And the FTA does not wait.
The system is automated.

If your payment is late by a single day, penalties apply automatically:

• 2% charged immediately

• 4% after 7 days

• 1% per day from day 30 (up to 300%)

For a business with heavy cash outflow, this can snowball fast.

That’s why understanding how to pay is just as important as calculating what to pay.

Let's jump right into it

All the Ways to Pay VAT in the UAE

VAT payments happen inside EmaraTax the FTA’s online portal.

Here are the three ways founders typically settle VAT and when each one makes sense

1) Pay by Card (MagnatiPay)

This is the simplest method.

You can settle VAT using:

• Visa

• Mastercard

How to do it:

• Log in to EmaraTax

• Go to My Payments

• Select Make Payment

• Choose Card Payment (MagnatiPay)

• Enter your card details and confirm

Fees: Around 2–3%
Best for: Quick payments or smaller VAT amounts
Watch out for: High fees on large payments

You get instant confirmation; which is why many last-minute payers rely on this option.

2) Pay by eDebit (Direct Bank Payment)

This method connects your bank account directly to EmaraTax for a seamless transfer.

Supported banks include:

• Emirates NBD

• First Abu Dhabi Bank

• Dubai Islamic Bank

• Citibank

• …and others.

What to expect:

• AED 10 fee

• Payment may take up to 30 minutes to reflect

• For corporate accounts, all signatories must approve within 3 days or the payment expires

Best for: Businesses that want to avoid card fees
Risk: Delays if approvals aren’t completed in time

3) Pay by Bank Transfer Using Your GIBAN

Every VAT-registered business has a unique GIBAN; a Generated IBAN shown inside EmaraTax.

This is the preferred method for high-value VAT payments.

How it works:

• Copy your GIBAN from EmaraTax

• Add it as a beneficiary in your banking app

• Transfer the exact VAT amount in AED

• Include the payment reference if shown

Processing time:
Local transfer: up to 24 hours

Critical reminder:
Each tax type has its own GIBAN.
Never use your VAT GIBAN to pay excise tax.

Misallocated payments take time, and emails, to fix.

4) Paying VAT from Outside the UAE

If your business uses an international bank account (common with holding companies), you can still pay VAT via SWIFT transfer.

You’ll need:

• Your GIBAN

• Beneficiary: Federal Tax Authority

• SWIFT code: CBAUAEAAXXX

• Currency: AED only

Processing time: 3–5 business days

Plan ahead: Pay at least one week early to avoid penalties.

VAT Payment Deadlines in the UAE

Your VAT payment is due no later than the 28th day following your tax period.

Examples:

• Jan–Mar (Q1) → due 28 April

• Monthly July return → due 28 August

Important:

If the 28th falls on a weekend or holiday, the deadline usually does not move.

Bank delays, signatory delays, and “it didn’t go through yet” do not protect you from penalties.

Mistakes That Cost UAE Businesses Money

1) Paying on the last day

GIBAN transfers need 24 hours.
SWIFT transfers: 3–5 days.

Last-minute payments are the #1 cause of penalties.

2) Using the wrong GIBAN

Each tax account has its own GIBAN.
A wrong transfer = the system won’t match it.

You’ll need to file a manual correction with the FTA.

3) Missing the payment reference

If EmaraTax provides a reference number, include it in the transfer.
It speeds up allocation and reduces errors.

4) Assuming partial payments stop penalties

Penalties apply to any unpaid amount, even if a small balance remains.

5) Thinking free zone = full VAT exemption

Designated Zones only have limited relief.
Most services and mainland sales remain taxable.

What the FTA Charges for Being Late

Late payment penalties are strict:

• 2% immediately

• 4% on day 7

• 1% per day from day 30 (up to 300%)

Example:

If you owe AED 10,000 and delay two months → Your penalties can exceed AED 6,000.

VAT is easy to pay; penalties are not easy to undo.

Best Practices for Smooth VAT Payment

• Pay at least 24 hours early

• If paying internationally, pay a week early

• Copy your GIBAN directly from EmaraTax (don’t rely on old notes)

• Include reference numbers

• Save all payment receipts

• Check if you have older unpaid balances in your history

These small habits can save founders thousands in penalties.

Bottom Line

Paying VAT in the UAE is simple; as long as you respect timing and choose the payment method that matches your business.

Whether you pay by card, eDebit, or GIBAN, the key is the same: prepare early and avoid the last-minute rush.

If you want Nimbus Finance to review your VAT setup, handle filing, or clean up past VAT periods before an issue grows, you know where to find us.