UAE VAT Registration Threshold Explained

By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03

Whether you must register for VAT depends on your taxable supplies against two thresholds. Getting this wrong — registering too late, or not at all — is one of the most common and expensive VAT mistakes, because late registration carries an AED 10,000 penalty.

The two thresholds

• Mandatory: AED 375,000. You must register once your taxable supplies and imports have exceeded this in the past 12 months, or you expect them to in the next 30 days.
• Voluntary: AED 187,500. You may register once your taxable supplies, imports or taxable expenses have exceeded this.

What counts as taxable supplies

Taxable supplies include your standard-rated (5%) and zero-rated (0%) sales, plus imports subject to the reverse charge. Exempt supplies do not count towards the threshold. It is a rolling 12-month test, not a calendar-year one, so you must monitor it continuously.

Why voluntary registration can help

Registering voluntarily lets a growing business recover input VAT on its set-up and running costs before it reaches the mandatory threshold. The trade-off is the compliance of filing returns, so it is a judgement call.

Monitoring the threshold

Keep a rolling total of taxable supplies month by month. The moment the trailing 12 months cross AED 375,000, or you sign a contract that will push you over within 30 days, the clock starts and you must register.

Frequently asked questions

What is the mandatory VAT threshold in the UAE?

AED 375,000 of taxable supplies and imports over the past 12 months, or expected in the next 30 days.

What is the voluntary VAT threshold?

AED 187,500 of taxable supplies, imports or taxable expenses.

Do exempt supplies count towards the threshold?

No. Only taxable supplies — standard-rated and zero-rated — and relevant imports count.

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