Tax & Compliance · VAT

VAT registration in the UAE

You must register for VAT once your taxable supplies and imports exceed AED 375,000 over the previous 12 months — or once you expect to cross that figure within the next 30 days. Below that, registration is optional from AED 187,500. Both thresholds are set by the Federal Tax Authority.

FTA thresholds, re-verified Aug 2026AED 375,000 / AED 187,500No threshold for non-residents
Get a setup plan Talk to an advisor
Which threshold applies

Three positions, not two

Thresholds verified against the Federal Tax Authority, August 2026.

Mandatory — AED 375,000 Taxable supplies and imports, past 12 months or the next 30 days. Registration required.
Voluntary — AED 187,500 Supplies, imports or taxable expenses. Registration optional.
Non-resident — no threshold Any taxable supply in the UAE. Required from the first supply.
  • The 30-day forward test can be triggered by a signed contractThe obligation can arise before any money moves. Businesses that track the threshold on received revenue tend to find this out late.
  • Late registration carries an AED 10,000 administrative penaltyAligned across VAT, excise and corporate tax (Ministry of Finance). The penalty framework was amended by Cabinet Decision No. 129 of 2025, in force from 14 April 2026.
  • The activity on your licence has to match the supplies you declareA mismatch is the commonest cause of a resubmission — the application describes supplies the licence does not permit.
At a glance

The essentials

Mandatory threshold
AED 375,000 — taxable supplies and imports, past 12 months or next 30 days
Voluntary threshold
AED 187,500 — supplies, imports or taxable expenses
Non-residents
No threshold; obligation from the first taxable supply in the UAE
Standard rate
5%
Late registration penalty
AED 10,000
Tax period
Set on your registration certificate — quarterly for most
Side by side

Does this apply to you

Should you register voluntarily?

The obligations are identical whether you registered by choice or by law.

✓

This applies to you if

  • You carry meaningful UAE input VATWhich you would otherwise absorb into your own cost base.
  • You sell mainly to VAT-registered businessesThey reclaim it anyway, so adding VAT costs you nothing in competitiveness.
  • You are approaching the mandatory thresholdAnd would rather not manage the crossing under a 30-day clock.
!

It may not apply if

  • You sell mainly to consumersRegistering adds 5% to your price with nothing gained — they cannot reclaim it.
  • You are not ready to file returns on timeThe obligations are identical whether you registered by choice or by law.
The process

1
FAQ

Common questions

Ask AgentBiz

Your tax period is set on your registration certificate — quarterly for most, monthly above a certain turnover. The first period runs from your effective registration date, not from when the certificate arrives.

Pre-registration input tax can be recoverable in defined circumstances. It is worth reviewing rather than assuming, because the conditions are specific.

Deregistration has its own tests and timing. Leaving is not simply the reverse of joining.

Being in a free zone does not exempt you. Designated-zone rules affect how certain supplies are treated, not whether the thresholds apply.

Related services

Often needed alongside

Corporate Tax & VAT

The other federal registration, with its own deadlines.

Read more →
 Excise Tax

Separate registration, no threshold at all.

Read more →
 Accounting & Bookkeeping

Returns are only as reliable as the ledger under them.

Read more →
Written by Bizvisor EditorialBizvisor in-house editorial team

Regulations verified 11 August 2026

Talk to an advisor

Not sure whether you have crossed the threshold?

The 30-day forward test can be triggered by a contract you have already signed. Send us twelve months of supplies and we will tell you where you stand and when registration is due.

Get a setup plan WhatsApp an advisor