VAT Registration in the UAE: Thresholds and Practical Steps

The standard rate, briefly

The Ministry of Finance records that VAT started in the UAE on 1 January 2018 at a standard rate of 5%. The Decree-Law also provides a zero rate and exemptions for defined supplies. Registration is a separate question from the rate on a particular invoice.

Mandatory registration

The Federal Tax Authority’s registration guidance, updated on its site in 2026, says a UAE-resident business must register if the total value of taxable supplies and imports exceeds AED 375,000 over the previous 12 months, or is expected to exceed that amount in the next 30 days.

That sentence already contains the limits. The measure is taxable supplies and imports, not profit and not every dirham that hits the bank. An expectation of crossing the threshold in the next 30 days can trigger registration before the historical 12 months do. Non-resident businesses that make taxable supplies in the UAE are subject to different rules and should not use the resident threshold by default.

Voluntary registration

A resident business that is under the mandatory threshold may apply to register voluntarily if taxable supplies and imports, or taxable expenses, exceed AED 187,500 on the same previous-12-months or next-30-days tests. Voluntary registration is a choice with ongoing return obligations. It is not always an advantage.

What to gather before applying

The application asks for the legal person, the licence and figures that support the threshold calculation. Those figures should come from invoices and import records, not from a rounded turnover conversation. If the books are behind, close them first.

Score Plus Auditing L.L.C can review whether the threshold appears to be met and support the registration. The conclusion still depends on your supplies. Our VAT services page explains how an engagement is scoped.