UAE VAT Registration mandatory and voluntary registration with the FTA

The threshold is a rolling test, not a year-end check

Many UAE businesses only look at VAT once a year and discover they crossed the registration threshold months earlier. The test is rolling: it looks back over the past twelve months and forward over the next thirty days, and the application must be made within 30 days of the obligation arising.

Under the UAE VAT law, Federal Decree-Law No. 8 of 2017, a business must register for VAT when the value of its taxable supplies and imports exceeds AED 375,000 over the previous twelve months, or is expected to exceed that amount in the next thirty days. A business may register voluntarily when its supplies or taxable expenses exceed AED 187,500, which can allow it to recover VAT on costs. VAT is charged at the standard rate of 5% on most supplies, with zero rating for exports and certain other supplies, and exemptions for some financial services and residential property.

Registration is completed on the FTA's EmaraTax portal with the trade licence, ownership and signatory documents, bank details and evidence of turnover. Once approved, the business receives a tax registration number and must charge VAT, issue tax invoices and file returns from the effective date of registration. Late registration attracts a penalty of AED 10,000, and the business must still account for VAT on supplies made since it should have registered, often without being able to recover it from customers. Businesses that make only zero-rated supplies may apply for an exception from registration, which we assess where it could apply, and non-resident businesses making taxable supplies in the UAE can have a registration obligation without any threshold.

Getting the effective date right matters as much as the application. We calculate turnover month by month, identify the date the obligation arose, and set up invoicing and accounting so that VAT is charged correctly from that date. For businesses with related entities, we consider whether a VAT group would be more efficient. Upcoming e-invoicing requirements, with mandatory phases starting from 2027, also make it worth configuring systems properly from the start.

After registration, our UAE VAT return filing and UAE VAT compliance services take over. For corporate tax, see corporate tax registration, and for changes or cancellation, tax registration and deregistration.