UAE VAT Registration: Thresholds, Deadlines and Common Mistakes
When a UAE business must register for VAT, when it can register voluntarily, and the mistakes that lead to penalties.
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VAT registration in the UAE depends on the value of your taxable supplies. Getting it wrong is expensive, so here is how the thresholds work.
The two thresholds
- Mandatory registration: if your taxable supplies and imports exceeded AED 375,000 in the previous 12 months, or you expect them to in the next 30 days.
- Voluntary registration: if your supplies or expenses exceed AED 187,500.
Taxable supplies include standard-rated and zero-rated supplies. Exempt supplies are not counted.
Deadlines
When you pass the mandatory threshold you generally have 30 days to apply. Late registration carries a fixed administrative penalty (AED 10,000 per the published rules), and VAT may be due on supplies made while you should have been registered.
What you need to apply
- Trade licence
- Emirates ID and passport of the owner or partners
- Contact details and bank account details
- Estimates of turnover
- Supporting documents such as contracts and invoices
After you register
You receive a Tax Registration Number (TRN). Every tax invoice you issue must carry it. Validate any TRN you receive with the TRN validator and read what a TRN is.
Common mistakes
- Counting only revenue in AED and ignoring foreign-currency sales
- Missing the 30-day window after crossing the threshold
- Treating exempt supplies as taxable, or the reverse
- Charging VAT before the registration is effective
- Not keeping tax invoices for input VAT
Start with software that already handles VAT
Set up your company and TRN once and every invoice carries the right details. Pyalm Books does this and is free during beta. Create an account.
Use the VAT calculator to add or remove 5% VAT.
Rules and deadlines change. Confirm the current position with the Federal Tax Authority (tax.gov.ae) or a qualified adviser before you file or pay.