By Karun Reji, Chartered Accountant, BI-Outsource. General information, not tax or legal advice. Rules change: check the current position before you act.
Short answer: you must register for VAT if taxable supplies and imports exceeded AED 375,000 in the last 12 months, or will exceed it in the next 30 days. You may register voluntarily above AED 187,500 (including expenses). Apply on EmaraTax within 30 days of crossing the threshold to avoid the late registration penalty.
The thresholds
| Test | Threshold | Registration |
|---|---|---|
| Taxable supplies + imports, past 12 months | Above AED 375,000 | Mandatory |
| Expected in next 30 days | Above AED 375,000 | Mandatory |
| Taxable supplies or expenses, past 12 months or next 30 days | Above AED 187,500 | Voluntary |
How turnover is measured
- Count standard-rated and zero-rated supplies, plus imports.
- Exempt supplies (such as certain residential rent) are not counted.
- Use a rolling 12-month total, checked every month.
Steps to register
- Create an EmaraTax account.
- Prepare trade licence, Emirates IDs and passports of owners, memorandum, bank details and turnover evidence.
- Submit the application and answer any FTA query.
- Receive your TRN and start charging 5% VAT from the effective date.
Penalty
Failing to register on time attracts an administrative penalty (currently AED 10,000). Check every month whether you are near the threshold.
Need help? We register and file VAT for UAE businesses. See accounting services in the UAE.
Frequently asked questions
5%, with some supplies zero-rated or exempt.
If you have significant VAT on costs or B2B customers who can recover VAT, voluntary registration often helps.
Yes, if they cross the threshold, unless all their supplies fall within designated zone rules.
Yes, if taxable supplies fall below the voluntary threshold, or must if you stop making taxable supplies.
