Registering for UAE VAT: thresholds, timing and voluntary registration

Value Added Tax (VAT) has applied in the UAE since 2018. For founders setting up a new company, the main questions are when registration becomes compulsory, whether it is worth registering before that point, and what the business must do once it is registered. This guide sets out the rules as published by the Federal Tax Authority (FTA) and summarised by major advisory firms.

The rate

The general VAT rate is 5% and, as PwC notes, it applies to most goods and services.

When registration is mandatory

According to the FTA, the mandatory registration threshold is AED 375,000. A business must register if either:

• the total value of its taxable supplies and imports exceeded AED 375,000 over the previous 12 months, or
• it anticipates that the total value of its taxable supplies and imports will exceed AED 375,000 in the next 30 days.

The second test matters for new companies. A business that signs a large contract early can cross the threshold on a forward-looking basis before it has a 12-month trading history.

The deadline to apply

PwC's summary of the VAT Executive Regulation states that a business "will have to apply for registration within 30 days of becoming required to register". Grant Thornton notes that a penalty may be imposed if a business fails to register at the correct time, so the threshold should be monitored from the first month of trading.

Voluntary registration

The FTA sets the voluntary registration threshold at AED 187,500. A business may register if its taxable supplies and imports, or its taxable expenses, exceeded AED 187,500 in the previous 12 months, or are expected to exceed it in the next 30 days.

Because the test can be met on expenses, a start-up with significant set-up costs can register before it has much revenue. Registering lets the business recover VAT on its costs, which often helps when its customers are themselves VAT-registered businesses. It also brings return filing and record-keeping obligations from the date of registration.

Foreign businesses

The FTA states that the mandatory threshold is not applicable to foreign businesses. Grant Thornton explains that there is no threshold for a non-resident business that makes taxable supplies in the UAE where no other person is obliged to account for the tax. A foreign company selling into the UAE should therefore check its position from the first sale, not only once it reaches AED 375,000.

Tax groups

Grant Thornton summarises the rules for VAT groups:

• Two or more related businesses can apply to register as a group if each has a place of establishment or fixed establishment in the UAE and one or more partners control the others.
• A person cannot be a member of more than one VAT group at a time.
• Individuals cannot be part of a VAT group.

After registration

Once registered, a business receives a Tax Registration Number (TRN). As summarised by PwC and Grant Thornton:

• VAT returns are submitted quarterly or monthly, depending on the tax period allocated by the FTA. The standard tax period is three calendar months.
• Returns are filed, and any VAT paid, by the 28th day of the month after the end of the tax period, or the next working day if that day is a weekend or public holiday.
• Records must be kept for five years, or seven years for records relating to real estate.

VAT registration is separate from corporate tax registration. A new company normally needs both, on different timelines. See our guide to Economic Substance and UBO rules, which covers how corporate tax registration fits in.

What to do

• Estimate taxable supplies, imports and expenses for the first 12 months and track them monthly against both thresholds.
• Apply within 30 days of becoming required to register, using the forward-looking 30-day test where a large contract is signed.
• Consider voluntary registration where set-up costs are high and customers are VAT-registered.
• If the business is based outside the UAE, check whether it must register from its first UAE sale.
• Prepare invoicing, bookkeeping and return processes before the first tax period starts, and plan for e-invoicing.

Our UAE VAT, e-invoicing and accounting and virtual CFO services cover registration, returns and the systems behind them. See also our guide to choosing a free zone or mainland company.

Sources

• Federal Tax Authority: Registration for VAT
• PwC Worldwide Tax Summaries: United Arab Emirates, other taxes (last reviewed 9 September 2026)
• PwC: Executive Regulations of the Federal Decree-Law on VAT
• Grant Thornton: Indirect tax guide, UAE

This page gives general information as at the date shown and is not advice for your specific situation. Rules in other countries are summarised for orientation; your home-country position should be confirmed before you act.