Who Needs to Register for VAT in the UAE? Thresholds and Deadlines

Since the introduction of Value Added Tax (VAT) in January 2018, the UAE has implemented a clear framework to determine which businesses must register, the applicable thresholds, and key filing deadlines. Failure to comply can result in significant penalties, so understanding the rules is essential for every entrepreneur.

Who Must Register for VAT?

VAT registration requirements are set out in Federal Decree-Law No. 8 of 2017 on VAT and its Executive Regulations. Businesses and individuals conducting taxable supplies or imports in the UAE may need to register if they meet the criteria below:

1. Mandatory VAT Registration

• Threshold: AED 375,000 in annual taxable supplies and imports.
• Who qualifies: Businesses whose taxable turnover in the past 12 months exceeded the threshold, or who expect to exceed it in the next 30 days.
• Deadline: Within 30 days of meeting the threshold.

2. Voluntary VAT Registration

• Threshold: AED 187,500 in annual taxable supplies or expenses.
• Who qualifies: Businesses below the mandatory threshold but above the voluntary threshold can opt to register to reclaim VAT on business purchases and enhance market credibility.

3. Exempt Activities

Certain sectors and transactions are exempt from VAT registration, such as:

• Some financial services
• Residential property (under specific conditions)
• Local passenger transport

However, even if your activities are exempt, it’s important to assess whether any part of your operations involves taxable supplies.

Key VAT Deadlines

• Registration:
  • Apply within 30 days of exceeding the threshold.
  • Late registration may lead to fines of AED 10,000.
• VAT Returns:
  • Typically filed quarterly (some businesses file monthly depending on FTA allocation).
  • Payment must be made by the 28th day of the month following the tax period.
• Record Retention:
  • Maintain VAT-related records for at least 5 years (some sectors require longer).

Why VAT Compliance Matters

Aside from avoiding fines, VAT compliance:

• Enhances your credibility with suppliers, clients, and financial institutions.
• Ensures you can claim input VAT on eligible expenses.
• Keeps your business aligned with UAE tax regulations.

  Expert Guidance with Caspian Accounting and Bookkeeping

Understanding whether you need to register for VAT — and staying on top of your filing deadlines — can be challenging, especially for new businesses. Caspian Accounting and Bookkeeping offers end-to-end VAT registration, filing, and advisory services to ensure your business remains fully compliant and penalty-free.

Need help with VAT registration or filing? Contact Caspian Accounting and Bookkeeping today for personalized support and expert advice.