VAT and corporate tax are two separate forms of taxes imposed in the UAE. Companies are subject to and are responsible for paying corporate tax, which is a tax based on profits. The VAT, on the other hand, is a consumption-based tax that is paid by people who use the products and services they purchase.
While value-added tax is computed by adding the value at each stage of manufacturing, corporate tax in Dubai is based on earnings. Unlike with VAT, where businesses must charge VAT and return it to the FTA, firms are expected to file taxes and subsequently pay corporate taxes on the earnings. In conclusion, whereas value-added taxes are based on consumption and are imposed on consumers for the products and services they use, corporation taxes are assessed based on profits.