Mandatory VAT registration in the UAE

All companies that have a place of residence in the UAE state and have supplied more than AED 375,000 in the value of goods in the member states in the past 12 months are required to register for UAE VAT. In addition, if companies expect that the total value of their supplies will exceed the mandatory registration threshold of AED 375,000 within the next 30 days, they will also have to register under the UAE VAT.

Mandatory registration -In the past 12 months, the resident value of the supplies exceeded AED 375,000

It is expected to exceed 30 days in the current fiscal year

Types of threshold conditions for business registration-The threshold limit for non-residents is not applicable. Regardless of the threshold, registration must be compulsory under VAT.

UAE voluntary VAT registration

All companies that have a place of residence in the UAE and do not require mandatory VAT registration can choose to apply for VAT registration voluntarily. Only if the annual supply or taxable expenses are not less than this, can this be done higher than the threshold for voluntary registration. The voluntary registration threshold is 187,500 dirhams, accounting for 50% of the mandatory registration threshold.

UAE voluntary VAT registration

In the past 12 months, the value of supplies/taxable expenses exceeded AED 187,500

It is expected to exceed 30 days in the current fiscal year

Here, registration is not compulsory. For companies, deciding whether to register is optional. Including taxable fees as a criterion for determining eligibility for voluntary registration provides all start-ups with the opportunity to register under UAE VAT. This is because, as a start-up company, the turnover or value of the supply may decrease, but it is very likely that a large amount of taxable expenses will be incurred in the beginning of the business or the beginning of the business. As a result, using taxable fees as a criterion for voluntary registration will enable all start-ups to register with zero turnover.

VAT exemption registration

Companies whose supply value from member states is below the voluntary registration threshold of AED 187,500 are not allowed to register with UAE VAT. In addition, companies that are only engaged in zero-rated supply can request VAT exemption registration.