Mandatory registration threshold
Standard UAE VAT rate
To register after crossing the threshold
| Your taxable supplies (rolling 12 months) | What applies |
|---|---|
| Below AED 187,500 | No registration available or required |
| AED 187,500 – 375,000 | Voluntary registration available |
| Above AED 375,000 | Registration is mandatory within 30 days |
| Expected to exceed AED 375,000 in next 30 days | Registration is mandatory in advance |
Registration is mandatory once your taxable supplies and imports have exceeded AED 375,000 over the previous twelve months, or when you expect to exceed that figure within the next thirty days. The test is rolling, not by financial year, so it is worth monitoring monthly rather than annually.
Voluntary registration is available from AED 187,500 of taxable supplies or expenses. It makes sense when you incur substantial input VAT before earning revenue — fit-out, equipment, professional fees — because you can recover it. It makes less sense if your customers are consumers who cannot recover the VAT you will now have to charge them.
The standard rate is 5%. Certain supplies are zero-rated, including qualifying exports outside the GCC implementing states, international transport and specified healthcare and education supplies. Others are exempt, including certain financial services and bare land. The distinction matters: zero-rated supplies allow input recovery, exempt supplies do not.
Administrative penalties apply for late registration, and you remain liable for the VAT that should have been charged from the date the obligation arose — which you may no longer be able to recover from customers. Late registration is one of the more expensive compliance mistakes to make in the UAE.
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