Who has to register
UAE VAT is charged at 5% on most goods and services, and class packs, memberships and treatments are standard-rated supplies. Registration becomes mandatory once your taxable supplies in the past twelve months pass AED 375,000, or when you expect to pass that figure in the next thirty days. You may register voluntarily once you pass AED 187,500, which lets you recover the VAT on your own costs where the supplier gives you a proper tax invoice.
For a studio, the practical question is timing. A busy single-location studio crosses the mandatory threshold within its first year, so the sensible approach is to set the booking system up as if you are registered from the start: sequential invoice numbers, VAT-inclusive prices and a clean ledger. Switching the VAT flag on later is a setting; rebuilding a year of receipts is a project.
What a tax invoice must contain
Once registered, every taxable sale needs a tax invoice. A full tax invoice carries the words Tax Invoice, your name, address and Tax Registration Number, a sequential number, the date, a description of what was sold, the unit price and quantity, the amount before VAT, the VAT rate and amount, and the total. Where the customer is registered, their name, address and TRN appear as well.
For sales to consumers, and for any sale under AED 10,000, a simplified tax invoice is allowed. It still needs the Tax Invoice label, your details and TRN, the date, the description and the total with the VAT amount shown. A card-terminal receipt is not a tax invoice, and a booking confirmation email is not one either, unless it carries these fields.
- Sequential numbers that never skip or repeat, across online and desk sales
- Your TRN on every invoice, including the ones members download from the portal
- The VAT amount shown, not just a note that it is included
Refunds and credit notes
A refund is not simply a negative sale. It needs a tax credit note that references the original invoice, with the amount and the VAT being reversed. When a member returns half a pack, the credit note carries the proportional VAT, and the VAT you reclaim on the return has to match the VAT you charged, to the fils.
This is where most spreadsheets fail. A pack sold for AED 1,050 carries AED 50 of VAT. Three partial refunds of AED 350 each must reverse AED 16.67, AED 16.67 and AED 16.66 of VAT, not three times AED 16.67. Your booking system should apportion the VAT from the original sale rather than recalculating it on each refund.
Displayed prices include VAT
Prices shown to consumers must be inclusive of VAT. A studio that lists a ten-pack at AED 1,000 and then adds 5% at checkout is breaking the rule and annoying the member. Set the price you want the member to pay, and let the system work out the VAT portion inside it.
The exception is a genuine business-to-business quote, for example a corporate wellness package, where the two sides agree prices before tax. The invoice then shows the net amount, the VAT and the gross.
Records and returns
Tax records, including invoices and credit notes, must be kept for five years after the end of the tax period they relate to. Keep them in a form you can export: the Federal Tax Authority can ask for them, and so can a buyer of your business.
Returns are quarterly for most registrants and due within 28 days of the end of the period. The figures you need are the output VAT on your sales, the input VAT on your costs and the net payable. If your booking system produces a monthly export of invoices and credit notes, the return is a copy-and-paste job for your accountant.
E-invoicing is next
The UAE is moving business-to-business invoicing onto an electronic network. Large businesses start in January 2027 and everyone else, including studios, from 1 July 2027, with an accredited service provider appointed by 31 March 2027. Consumer sales are outside the first phase, but the invoices you issue to corporate clients and partners will be caught. There is a separate guide on this site with the details.
What this means for your booking system
Ask any platform you are considering four questions. Does it issue a sequential tax invoice with my TRN on every payment, online and at the desk? Does it issue a credit note on every refund, with the VAT apportioned from the original sale? Can I switch VAT on the day I register without changing my prices? And can I export invoices and credit notes for any period in a form my accountant can use? If the answer to any of those is a workaround, the workaround becomes your job every month.
A note on this guide
The thresholds, invoice requirements and retention periods above are the published UAE rules as of the date shown. They are general guidance, not tax advice. Your accountant or tax agent should confirm how they apply to your studio, your registration date and your mix of sales.