Zoho Books is one of the most popular accounting tools for UAE small businesses, and it handles VAT well, if it's set up correctly. Most VAT problems we see in Zoho files come from a rushed set-up. This guide walks through the steps.
Menu names in Zoho Books change from time to time. If a label below looks different in your account, search for it in Settings.
Before you start
- Your TRN (Tax Registration Number) and VAT certificate
- Your effective registration date
- Your tax period: quarterly or monthly, and which months your quarters end
- Make sure your organisation's country is the UAE and the base currency is AED
Step 1: Turn on VAT and enter your TRN
In Zoho Books, open Settings and go to the taxes (VAT) settings. Mark the business as VAT registered, enter your TRN and the effective registration date, and choose your reporting period. If you trade internationally, enable the options for imports, exports and reverse charge.
Step 2: Check the tax rates
You'll need tax rates for the different VAT treatments:
| Treatment | Rate | Use for |
|---|---|---|
| Standard rate | 5% | Most sales and purchases in the UAE |
| Zero rate | 0% | Qualifying exports, international transport, some education and healthcare |
| Exempt | No VAT | Some residential property, local passenger transport, certain financial services |
| Out of scope | No VAT | Salaries, capital introduced, transfers between your own accounts |
Zero-rated and exempt are not the same: zero-rated sales let you recover input VAT; exempt sales generally don't. Picking the wrong one is a common error.
Step 3: Set default taxes on items and contacts
- Give each product or service a default tax rate.
- For each customer and supplier, set their place of supply (emirate or outside the UAE) and their TRN if they are VAT registered.
- Mark overseas suppliers so that imported services trigger reverse charge.
Step 4: Check your invoice template
A UAE tax invoice should show, among other things:
- The words "Tax Invoice"
- Your name, address and TRN
- The customer's name, address and TRN (if registered)
- Invoice number and date
- Description, quantity, unit price, VAT rate and VAT amount for each line
- Total excluding VAT, total VAT and total including VAT, in AED
Step 5: Connect banks and set rules carefully
Bank feeds and bank rules save time, but a rule with the wrong tax rate will repeat the mistake on every matching transaction. Review rules that apply a tax rate at least once a quarter.
Step 6: Review your first VAT return report
- Reconcile all bank accounts for the period.
- Run the VAT return report for the tax period.
- Check large or unusual items, zero-rated sales and reverse-charge entries.
- Confirm you hold valid tax invoices for the input VAT claimed.
- File on EmaraTax by the 28th day after the period ends.
See the VAT return due date calendar.
Getting ready for e-invoicing
Mandatory e-invoicing starts in 2027. Ask Zoho how your plan will connect to an Accredited Service Provider, and clean up customer and supplier TRNs now. Read our UAE e-invoicing guide.
Want it set up for you?
We set up Zoho Books for UAE VAT, migrate your data and keep your books and VAT returns up to date every month.