You must register for UAE VAT when your taxable supplies and imports go above AED 375,000 over the past 12 months, or when you expect them to go above AED 375,000 within the next 30 days. Registration is voluntary from AED 187,500. Both tests use turnover, not profit, and they are checked on a rolling basis, not against your financial year.
This guide explains the two thresholds, how to apply the backward and forward tests, what counts towards the total, the deadline and penalties, when voluntary registration makes sense, what happens after you register, and when you can deregister.
The two thresholds
| Mandatory | Voluntary | |
|---|---|---|
| Amount | AED 375,000 | AED 187,500 |
| What is counted | Taxable supplies and imports | Taxable supplies, imports or taxable expenses |
| Test | Past 12 months, or expected within the next 30 days | Past 12 months, or expected within the next 30 days |
| Result | You must apply to register | You may apply to register |
The voluntary test can also be met with taxable expenses. A new business that has spent heavily on fit-out, equipment or stock but not yet invoiced much can therefore register early and start recovering the VAT on those costs.
The two tests in practice
Looking back
Add your taxable supplies and imports for the last 12 months, and do it every month, because the window moves. A business invoicing AED 32,000 every month has AED 352,000 after 11 months and AED 384,000 after 12 months, so it crosses AED 375,000 in month 12. The same business at AED 30,000 a month totals AED 360,000 and never crosses on that pattern. Seasonal businesses need particular care, because one strong quarter can push the rolling total over the line.
Looking forward
If you sign a contract that you expect to push your supplies above AED 375,000 within the next 30 days, the obligation arises then, before the money arrives. A firm with AED 300,000 of sales in the last 12 months that signs an AED 100,000 job to be delivered next month must plan to register.
What counts and what does not
| Counts towards the threshold | Does not count |
|---|---|
| Standard-rated supplies (5%) | Exempt supplies, such as certain financial services, residential rents and local passenger transport |
| Zero-rated supplies, such as many exports of goods and services, international transport and certain education and healthcare | Sales of capital assets used in the business |
| Imports of goods and services subject to reverse charge | Activities outside the scope of UAE VAT |
Zero-rated is not the same as exempt. A business that exports most of its services charges 0% VAT, but those sales still count towards the threshold, and once registered it can recover the VAT on its costs. A business making only exempt supplies cannot register for those supplies and cannot recover related input VAT.
Non-resident businesses making taxable supplies in the UAE must register regardless of turnover, unless another person in the UAE is responsible for paying the VAT on those supplies.
Free zones and designated zones
Businesses in free zones follow the same registration thresholds as mainland businesses for their taxable supplies. Some free zones are also designated zones for VAT, where certain movements of goods are treated as outside the UAE for VAT purposes. That special treatment applies to goods in specific situations, not to services, and it does not remove the need to register when the thresholds are met, or to keep proper records of goods entering and leaving. If you trade goods through a designated zone, get advice on how your particular transactions are treated.
Related businesses
If several businesses are owned or controlled by the same people, the FTA can look at them together. Splitting one activity across separate companies to keep each below AED 375,000 does not avoid registration if the arrangement is artificial. Related companies can also choose to form a tax group and register together, which simplifies filing for groups with lots of intra-group transactions.
The deadline and the cost of being late
Once you are over the mandatory threshold, you have 30 days to apply through the FTA's EmaraTax portal. Late registration carries a fixed administrative penalty of AED 10,000, and the FTA can also require you to account for the VAT you should have charged from the date the obligation arose.
Example
A business that should have registered three months ago made AED 120,000 of taxable sales in that time without charging VAT. It now owes 5% of that, AED 6,000, from its own pocket if it cannot recover it from customers, on top of the AED 10,000 late-registration penalty. Registering on time would have cost nothing beyond the paperwork.
How to register
Registration is done online through EmaraTax, the FTA's portal. You create an account, add the business as a taxable person and complete the VAT registration form. Have these ready:
- trade licence, and memorandum or articles of association where relevant;
- passport and Emirates ID of the owner or authorised signatory, and proof of their authority;
- contact details and the business address;
- bank account details in the business name;
- turnover figures for the last 12 months with supporting evidence, such as sales invoices or an audited or management account summary;
- expected turnover and expenses for the next 30 days;
- details of imports, exports and customs registration if you trade goods.
The FTA may ask for more information before approving the application. Once approved, you receive a Tax Registration Number (TRN) and an effective date of registration, from which you must charge VAT. Apply as soon as you know you are over the threshold; waiting until the last day of the 30-day window leaves no room for questions from the FTA.
Should you register voluntarily?
Registering usually helps a business that:
- sells mainly to other VAT-registered businesses, which can recover the VAT you charge;
- has significant costs with VAT on them, such as rent on commercial premises, equipment or professional services;
- exports a large share of its sales, which are zero-rated, so it can recover input VAT while charging customers nothing extra.
It usually hurts a business that sells mainly to consumers, because it must either raise prices by 5% or absorb the VAT in its margin, and it takes on regular filing and record-keeping duties. Work through your own customer mix before deciding.
Example
A small design studio with AED 250,000 of annual sales, all to UAE companies, pays AED 8,000 a year in VAT on rent, software and equipment. If it registers voluntarily, its business customers recover the 5% it charges, so its prices are effectively unchanged, and it recovers the AED 8,000 it pays on costs. A café with the same sales to the public would face the opposite result: either a 5% price rise for customers who cannot recover it, or lower margins.
After you register
- Tax invoices: issue invoices showing your Tax Registration Number (TRN) and VAT separately, meeting the FTA's invoice requirements.
- VAT returns: file returns for each tax period, usually quarterly, by the 28th day after the period ends, and pay any VAT due by the same date.
- Records: keep invoices, import documents and accounting records for at least five years (longer for some assets).
- E-invoicing: from 2027, B2B invoices will need to go through an accredited e-invoicing provider, starting with large businesses in January and others in July.
The VAT Calculator and VAT Return Deadline Calculator help with the routine once you are registered.
Deregistration
You must apply to deregister if you stop making taxable supplies, and you may apply to deregister if your taxable supplies and expenses fall below AED 187,500 over 12 months. Businesses that registered voluntarily generally cannot deregister within the first 12 months. The VAT Deregistration Checker covers the conditions.
Checklist
- Every month, add up taxable supplies and imports for the last 12 months.
- Before signing a large contract, add its value to the next 30 days.
- Keep exempt supplies and capital asset sales separate in your records.
- If you cross AED 375,000, apply in EmaraTax within 30 days.
- If you are between AED 187,500 and AED 375,000, compare the benefit of recovering input VAT with the extra filing work.
Common mistakes to avoid
- Measuring against the financial year instead of a rolling 12 months.
- Ignoring the forward-looking 30-day test.
- Leaving zero-rated sales out of the count.
- Splitting a business across companies to stay under the threshold.
- Confusing this AED 375,000 with the AED 375,000 corporate tax band, which is a profit figure and unrelated.
UAE VAT registration becomes mandatory once taxable supplies and imports exceed AED 375,000 over the past 12 months or are expected to within 30 days, and voluntary from AED 187,500. Check the rolling total every month, count zero-rated sales, apply within 30 days of crossing the line, and decide on voluntary registration based on who your customers are.
Information checked October 2026. Confirm current thresholds, penalties and filing rules with the Federal Tax Authority before acting.