Value Added Tax (VAT) in the UAE has been around since 2018, yet many business owners still find themselves confused — “Do I need to register?” “What if I am under the threshold?” “What if I only sell outside the UAE?” "Is Corporate Tax registration is no enough?"
Let’s break down the VAT registration requirements so you can stay compliant and avoid unnecessary penalties.
Mandatory VAT Registration
You must register for VAT if:
- Your taxable turnover (in the past 12 months OR expected in the next 30 days) exceeds AED 375,000.
- This includes:
- Standard-rated supplies (5%)
- Zero-rated supplies (0%)
- Imported goods/services (reverse charge)
- Free zone to mainland transactions
Important: This threshold is based on revenue, not profit.
Voluntary VAT Registration
You may register voluntarily if:
- Your taxable turnover or expenses are above AED 187,500.
- This can benefit startups and small businesses looking to claim input VAT and appear more credible to clients and partners.
Who Doesn’t Need to Register?
You don’t need to register if:
- You are fully exempt (e.g., certain financial services).
- Your taxable supplies and imports are consistently below AED 187,500.
- You only provide out-of-scope or non-taxable supplies.
However, even in these cases, keeping clean accounting records is mandatory in case FTA requests a review.
Things That Can Trigger Mandatory Registration
Many businesses unknowingly cross the threshold. Here’s what to monitor:
- Receiving large one-time payments
- Signing contracts with long-term revenue
- Supplying digital services to UAE clients
- Importing services (subject to reverse charge)
Finzoryx Tip:
VAT registration is not just a formality — it affects pricing, invoicing, reporting, and more. Doing it late or incorrectly can lead to:
- AED 10,000 penalty for late registration and more
- Backdated VAT payments
- Risk of audit
Need Help?
At Finzoryx, we simplify VAT for startups and SME's. Whether you are unsure if you need to register or already missed the deadline, we have got your back.
Contact us
📞 0503978121