VAT in the UAE is charged at a standard rate of 5%. Not every business has to register, but once you pass the threshold, registration is mandatory. Here's how to work out where you stand.
The two thresholds
| Registration | When it applies |
|---|---|
| Mandatory | Your taxable supplies and imports exceed AED 375,000 in the past 12 months, or you expect them to exceed it in the next 30 days |
| Voluntary | Your taxable supplies and imports, or taxable expenses, exceed AED 187,500 |
What counts toward the threshold
The test is based on taxable supplies and imports: the goods and services you sell that are subject to VAT, plus goods and services you import. Supplies that are exempt from VAT don't count. Look at the last 12 months on a rolling basis, not just the calendar year, and also at the next 30 days if a big order is coming.
Why some businesses register voluntarily
Registering voluntarily lets you recover VAT on business purchases and makes you look established to corporate buyers who expect VAT invoices. It also means charging VAT and filing returns, so it fits businesses with steady sales or large VAT-bearing costs.
What changes once you're registered
- You receive a Tax Registration Number (TRN) and show it on your invoices
- You charge 5% VAT on taxable sales and issue tax invoices
- You file VAT returns on the schedule the Federal Tax Authority (FTA) sets
- You keep records of sales, purchases and VAT for inspection
Don't register late
The FTA can apply penalties for late registration. If you're close to the threshold, track your 12-month total every month so you register on time.
What about corporate tax?
Corporate tax is a separate registration. Every taxable company must register for corporate tax, including free zone companies, even if its income stays below the AED 375,000 band taxed at 0%.
Next step: not sure whether you've crossed the threshold? We check your numbers and handle the filing on EmaraTax. See VAT and corporate tax registration.
General information, not tax advice. Thresholds and rules can change; we check current FTA guidance for every registration.