VAT registration in the UAE depends on the value of your taxable supplies and imports, not your profit. Get the timing wrong and the penalty is AED 10,000.
The two thresholds
| Registration | Threshold |
|---|---|
| Mandatory | Taxable supplies and imports above AED 375,000 in the previous 12 months, or expected to exceed it in the next 30 days |
| Voluntary | Taxable supplies and imports, or taxable expenses, above AED 187,500 |
Check the total every month on a rolling 12-month basis, not just at the end of your financial year.
The deadline and the penalty
Once you pass the mandatory threshold, you must apply to register within 30 days. Registering late carries a penalty of AED 10,000.
Should you register voluntarily?
Voluntary registration lets you recover VAT on your costs, which helps if you sell mainly to other VAT-registered businesses or are investing heavily before you start trading. It also means quarterly returns and record-keeping obligations, so it is not right for everyone.
What changes once you are registered
- You charge 5% VAT on standard-rated sales and issue valid tax invoices.
- You file VAT returns, usually quarterly, within 28 days of the end of each period.
- Prices you display to customers must include VAT. The Federal Tax Authority has warned that displaying prices without tax can lead to a fine of AED 15,000.
- You keep VAT records, generally for at least five years.
How NAMAA can help
We track your taxable supplies against the thresholds, handle your registration, and prepare each return from reconciled books for your approval.
See our VAT service or book a consultation.
Sources
- Sovereign Group: UAE VAT penalties overview
- Gulf News: Businesses must display prices inclusive of VAT
- Federal Tax Authority
Checked 4 October 2026. This guide is general information, not advice for your specific situation.