UAE VAT registration is based on two thresholds and a rolling 12-month test. Getting it wrong is expensive: missing the deadline brings a fixed penalty of AED 10,000.
The thresholds
| Threshold | Test | |
|---|---|---|
| Mandatory | AED 375,000 | Taxable supplies and imports in the last 12 months exceed it, or are expected to in the next 30 days |
| Voluntary | AED 187,500 | Taxable supplies or taxable expenses exceed it |
The rolling 12 months
The mandatory test is not based on your financial year or the calendar year. At the end of every month, look back over the previous 12 months. If your taxable supplies and imports have gone above AED 375,000, you have crossed the threshold.
Example. A consultancy started in March 2025. By the end of January 2026 its sales over the previous 12 months total AED 390,000. It crossed the threshold at the end of January and must apply within 30 days.
The forward-looking test
You also have to register if you expect your taxable supplies to exceed AED 375,000 in the next 30 days alone. This catches businesses that land a single large contract.
Example. A new trading company signs an order worth AED 500,000, to be delivered next week. It must register now, even though it has no sales history.
What counts
Include: standard-rated (5%) supplies, zero-rated (0%) supplies, and imports of goods and services that would be taxable if supplied in the UAE.
Exclude: exempt supplies (such as residential rent after the first supply, bare land and certain financial services), and sales of capital assets.
Voluntary registration
You can register voluntarily if your taxable supplies, or your taxable expenses, exceed AED 187,500. The expenses route helps businesses that are spending heavily before revenue arrives, such as a start-up fitting out premises. Our VAT registration checker shows whether this option is open to you, and its page discusses when voluntary registration makes sense.
The deadline and penalty
Apply through the FTA’s EmaraTax portal within 30 days of crossing the mandatory threshold. Late registration carries a fixed AED 10,000 penalty. Keep a monthly record of your rolling 12-month total so you see it coming.
Related businesses
If you control several businesses, the FTA can treat them as one for the threshold if it believes the split is artificial. Splitting turnover between licences to stay under the limit is a known risk area.
Deregistration
If your taxable supplies fall below AED 187,500 for 12 months, or you stop making taxable supplies, you can, and in some cases must, apply to deregister. Deregistering is not automatic, and you must file a final return.
A simple monthly check
Keep a running table like this and update it at each month end:
| Month | Taxable sales this month | Total for the last 12 months |
|---|---|---|
| January | 28,000 | 301,000 |
| February | 34,000 | 322,000 |
| March | 41,000 | 349,000 |
| April | 38,000 | 371,000 |
| May | 30,000 | 383,000 (threshold crossed) |
In this example the business crosses AED 375,000 at the end of May and must apply by the end of June.
Frequently asked questions
Do I count sales made before I got my trade licence?
Count taxable supplies made in the course of business. If you traded before licensing, ask an adviser how those sales affect your registration date.
What if one big contract will push me over in a few weeks?
The forward-looking test applies when you expect taxable supplies in the next 30 days alone to exceed AED 375,000. A large contract due within that window can trigger registration immediately.
Can I register voluntarily and then charge VAT straight away?
Only from your registration effective date, once the FTA approves your application and issues your TRN.
