Guide · 7 min read
UAE VAT registration threshold: when you must register, and when you can
The UAE VAT registration threshold is AED 375,000 (mandatory) and AED 187,500 (voluntary). When the 12-month and 30-day tests apply, who is exempt from registering, and how to apply on EmaraTax.
By Startup Roof Editorial ·
General information, not legal or tax advice. Rules change; check the official source.
Value Added Tax (VAT) has applied in the UAE since 1 January 2018 at a standard rate of 5%, and it is administered by the Federal Tax Authority (FTA) (FTA: VAT). For a new company, VAT is easy to forget: corporate tax registration starts with the licence, but VAT registration depends on how much you sell. This guide explains the two thresholds, when the clock starts, and what to prepare for EmaraTax, the FTA's online portal.
Two thresholds: mandatory and voluntary
The FTA sets two registration thresholds based on the value of your taxable supplies and imports (FTA: VAT registration):
| Threshold | What it means | |
|---|---|---|
| Mandatory | AED 375,000 | You must register once taxable supplies and imports pass this amount |
| Voluntary | AED 187,500 | You may register once taxable supplies and imports, or taxable expenses, pass this amount |
Below AED 187,500 you generally cannot register. Between the two figures registration is your choice. Above AED 375,000 it is required.
How the test works: looking back and looking ahead
The mandatory threshold is tested in two directions, as the FTA's registration guidance and the VAT Executive Regulation describe (FTA: Registration for VAT):
- Looking back. If the total value of your taxable supplies and imports over the previous 12 months has gone over AED 375,000, you must register.
- Looking ahead. If you expect your taxable supplies and imports to go over AED 375,000 in the next 30 days, you must register.
The forward-looking test catches many startups out. If you sign a large contract that will take you over the threshold next month, the obligation may start now, not after the money arrives. Once you are required to register, you must submit your application to the FTA within 30 days. Late registration carries a penalty, and the FTA can register you from the date you first became liable (FTA: VAT registration). Keep a monthly running total of the last 12 months of taxable sales, and check any big upcoming deals against it.
What counts? Taxable supplies include standard-rated (5%) and zero-rated supplies. Exempt supplies (certain financial services, some residential property and others listed by the FTA) do not count towards the threshold. Check how your own activity is treated on the FTA's VAT pages before you rely on a figure.
When voluntary registration makes sense
Registering before you must has trade-offs worth discussing with an adviser:
Possible benefits
- You can recover input VAT on eligible business costs (equipment, software, rent where applicable, professional fees), which can help a startup with high set-up costs.
- Some larger clients prefer to buy from VAT-registered suppliers.
- You won't be caught out when you cross the mandatory threshold.
Possible downsides
- You must charge VAT on taxable sales, which can raise prices for customers who can't recover it (for example, individual consumers).
- You take on filing obligations: regular VAT returns and record-keeping.
- Late filing and late payment carry administrative penalties.
The voluntary threshold can also be met through taxable expenses, which helps a pre-revenue company with significant set-up costs. You will need evidence of those expenses.
VAT is separate from corporate tax
VAT and corporate tax are two different regimes, both run by the FTA on EmaraTax, with separate registrations and separate numbers. Corporate tax registration is tied to your licence date. VAT registration is tied to your sales. If you have already registered for corporate tax, you still need a separate VAT registration once you meet a threshold. See our corporate tax guide for the corporate tax side.
Applying on EmaraTax
Registration is done online through the FTA's EmaraTax platform (FTA: VAT registration). Before you start, prepare:
- Trade licence (valid copy)
- Owners' and authorised signatory's details: passport and Emirates ID copies, and proof of authorisation for the signatory
- Company contact details and address
- Certificate of incorporation, memorandum of association or partnership agreement, where applicable
- Power of attorney for the authorised signatory if the manager isn't named in the MoA
- A signed and stamped turnover declaration letter showing taxable supplies and monthly sales since you started
- Supporting evidence such as invoices, purchase orders, contracts and leases; for expected revenue, signed contracts or purchase orders; for the expenses route, at least five VAT invoices exceeding the threshold
- Customs information if you import or export
- Bank letter with the account details (listed as optional by the FTA; for a company, the account must be in the company's name)
Once approved, you'll receive a Tax Registration Number (TRN). Put it on your tax invoices and keep the registration certificate with your company records.
The FTA lists the service as free, with about 45 minutes to submit and 20 business days for the FTA to process a complete application. Documents are uploaded as PDFs. Check the current service page before you apply, because requirements can change.
After you register
Registration is the start, not the end. Once registered you will need to:
- Issue tax invoices that meet FTA requirements, showing your TRN and VAT charged.
- File VAT returns for each tax period assigned by the FTA, and pay any VAT due by the deadline.
- Keep records of sales, purchases, imports and exports. The FTA sets minimum retention periods, so keep digital copies from day one.
- Update your registration if your details change, such as licence, address or signatory.
Missing a registration, filing or payment deadline can lead to administrative penalties. The FTA publishes its penalty rules and has offered penalty waivers in some situations (FTA: Waiver of penalties), but it is far simpler to stay on time.
Deregistration
If your taxable supplies fall below the threshold or stop, you may be able to, or be required to, deregister. Check the FTA's rules; don't simply stop filing.
A simple VAT checklist for founders
Frequently asked questions
What is the VAT registration threshold in the UAE? Registration is mandatory once taxable supplies and imports pass AED 375,000, and voluntary once taxable supplies and imports, or taxable expenses, pass AED 187,500. Below AED 187,500 you generally cannot register.
Is there an exception from VAT registration in the UAE? There is no separate exception for startups or free zone companies: the same thresholds apply. Exempt supplies do not count towards the threshold, so a business making only exempt supplies may stay below it. If your taxable supplies fall below the threshold or stop, you may be able to deregister. Check the FTA's rules for your activity.
Does a free zone company have to register for VAT? Being in a free zone doesn't remove VAT obligations by itself: the same thresholds apply. Some free zones are "Designated Zones" with special VAT treatment for certain supplies of goods. The FTA says whether a Designated Zone business trading goods must register depends on its activities and supplies, and it may ask for a business flow and supply-chain evidence. Check the FTA's guidance for your zone and activity.
I'm a freelancer or a sole establishment. Do the thresholds apply to me? Yes. The FTA says the registration rules apply to any natural or legal person carrying out an economic activity in the UAE, even without a trade licence. If one person owns several sole establishments, they are registered under a single TRN and the threshold is calculated on their combined activity.
Can I charge VAT before I receive my TRN? No. Only registered businesses may charge VAT and issue tax invoices. If you are close to the threshold, apply early so your registration and invoicing line up.
What if I'm not sure whether I've crossed the threshold? Talk to a registered tax agent or adviser, and use the FTA's own guidance. Registering late can lead to penalties, so it's better to check sooner.
Where Startup Roof fits
Tax rules are one part of building a company in the UAE. Startup Roof is a UAE-first founder ecosystem with source-checked guides, practical tools and a founder network to help you take each step with more confidence. Explore it at startuproof.com, and see the setup guide at startuproof.com/guides/setup-and-banking.
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Sources (checked 15 Oct 2026)
- Federal Tax Authority: VAT
- Federal Tax Authority: VAT registration service (page updated 19 Aug 2026)
- Federal Tax Authority: Registration for VAT
- FTA: Executive Regulation of Federal Decree-Law No. 8 of 2017 (PDF)
- Federal Tax Authority: Waiver of penalties
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