**Compulsory VAT Registration in the UAE**

In the United Arab Emirates (UAE), businesses are obligated to undergo VAT registration under specific circumstances:

1. **Resident Businesses:** If a business is based in the UAE and its total supplies in the member states have exceeded AED 375,000 in the preceding 12 months, it must undergo mandatory UAE VAT registration. Furthermore, businesses projecting that their total supplies will surpass the AED 375,000 threshold within the next 30 days must also register for VAT.

2. **Non-Resident Businesses:** Non-resident businesses are required to register for VAT in the UAE, irrespective of the value of their supplies.

**Mandatory Registration Thresholds Based on Business Type**

– **Resident Businesses:** The value of supplies must either have exceeded AED 375,000 in the previous 12 months or be expected to do so within the next 30 days in the current financial year.

– **Non-Resident Businesses:** No specific threshold applies; VAT registration is mandatory regardless of the value of supplies.

**Optional VAT Registration in the UAE**

For UAE-based businesses that do not meet the mandatory VAT registration criteria, there is an opportunity for voluntary VAT registration. This option is available if the annual supplies or taxable expenses incurred exceed the voluntary registration threshold, which is AED 187,500. This threshold is 50% of the mandatory registration threshold.

**Criteria for Voluntary Registration:**

– The value of supplies or taxable expenses must surpass AED 187,500 in the previous 12 months or be expected to do so within the next 30 days of the current financial year.

In such cases, registration is not obligatory, and businesses can choose whether to register voluntarily. Including taxable expenses as a criterion for voluntary registration accommodates startup businesses, as they may have limited turnover or supply values, but frequently incur significant taxable expenses when initiating or conducting their operations. Consequently, considering taxable expenses as a criterion for voluntary registration allows startups to register even if their turnover is negligible.

**VAT Registration Exemptions**

Businesses with supplies in the member states that fall below the voluntary registration threshold of AED 187,500 are not permitted to register for UAE VAT. Additionally, businesses solely engaged in providing zero-rated supplies may seek exemptions from VAT registration.

You can also Register for VAT Registration on our website:
https://thevatconsultant.com/