VAT Registration in UAE

With the introduction of VAT in the UAE, there are considerations for business owners. VAT can have a profound effect on both the revenue and the working of a company.

Here’s clarifying the doubts that you, as a business owner, might have.

Advantages of VAT Registration in UAE -

Check out the advantages of VAT registration in the UAE:

  • It helps in grabbing better market opportunities
  • It enables the claim of VAT refunds
  • It improves the company's profile
  • It prevents unwanted penalties

How is VAT collected?

Businesses need to document their earnings and expenditures germane to VAT.

Registered businesses must:

  • Charge a VAT of 5% to their customers
  • Incur a VAT on the goods and services they receive from their suppliers. The difference between the two amounts is that they get paid or reclaimed from the government.

Process for VAT Registration in the UAE -

Read the steps for understanding the process for VAT registration in the UAE:

  1. Open an e-service account
  2. Logging into your Accounts
  3. Click on the VAT registration form

The online VAT registration form includes 6 sections, as shown below:

  • Declaration 
  • Applicant details
  • Applicant contact details
  • Applicant's Banking details
  • Business Relationship details
  • About the VAT registration in the UAE

Who has to Register for the VAT in UAE?

Below are the eligibility thresholds for VAT registration in the UAE:

Businesses that do not have a place of residence in the UAE will have to mandatorily do VAT registration in the UAE, irrespective of the registration threshold.

Mandatory Registration

Type of Business

Registration Threshold Conditions


Value of Supplies Exceeds

AED 375,000

In the Previous 12 Months


The threshold limit is not applicable

Compulsorily registration under VAT, irrespective of threshold

Voluntary VAT Registration in UAE

All businesses with an address are not required to do VAT registration in UAE. There is an option called Voluntary registration. 

Voluntary VAT Registration in UAE

The value of Supplies/ Taxable Expenses exceeds AED 187,500

In the Previous 12 Months


Anticipated to exceed in the next 30 days during the current financial year

VAT Registration Exemption in UAE

Applies to companies with a value lesser than AED 1,87,500. Such businesses aren't allowed VAT registration in the UAE. 

Businesses with zero-rated supplies can also apply for VAT exemptions.

Documents Required for VAT Registration Service in Dubai

These are the documents you'll need for VAT certification in Dubai:

  • Details of Bank Account
  • Description of business activities
  • Trade license copy of the company
  • Proof of the 12 month Sale documents
  • Turnover for the last 12 months in AED
  • Turnover prediction in the next 30 days
  • Passport copy or the copy of Emirates ID
  • Certificate of Incorporation of the company
  • Certificate of Power of Attorney of the company
  • Certificate of Articles of Association of the company
  • The estimated value of exports for one year to all GCC countries
  • Your consent, whether you deal with GCC suppliers or customers
  • The estimated value of imports for one year from all GCC countries

Penalty for Failing to Register for VAT

Businesses who fail into the UAE VAT registration threshold limit, get penalized. Around AED 20,000.

The Epilogue of Insights

A VAT will come into effect in the UAE from 1 January 2018. Companies with an annual turnover of over AED 150 million need to register for VAT. The registration should happen before October 31, 2017. And those with an annual turnover of over AED 10 million have to register before November 30, 2017.

VAT in UAE is an important task for a business owner to do. It’s always better to take an expert’s help. Here we are at Commitbiz to help you with VAT registration in UAE and company formation services.

Contact us right away!

Frequently Asked Questions (FAQs)

What is VAT, and how does it apply in the UAE?

Value Added Tax (VAT) is a consumption tax levied on goods and services at each stage of the supply chain. In the UAE, VAT was introduced on January 1, 2018, at a standard rate of 5%. Unless specifically exempt or zero-rated, it applies to a wide range of goods and services.

Who is required to register for VAT in the UAE?

Businesses that meet the specified threshold for taxable supplies and imports must register for VAT in the UAE. As of my knowledge, a cut off in January 2022, the mandatory registration threshold was AED 375,000 of taxable supplies per year. However, businesses with taxable supplies between AED 187,500 and AED 375,000 could register voluntarily.

What are the VAT exemptions and zero-rated supplies in the UAE?

Certain goods and services are either exempt from VAT or subject to a 0% (zero-rated) tax rate in the UAE. Exempt supplies include some financial services, residential properties, and bare land. Zero-rated supplies include certain food items, healthcare, education, and exports. Understanding the distinction is crucial for businesses to determine the correct VAT treatment.

How does VAT filing and payment work in the UAE?

VAT-registered businesses in the UAE must file regular VAT returns, typically every quarter. The filing includes taxable supplies, input tax, and output tax. Businesses calculate the VAT liability; if the output tax exceeds the input tax, the difference must be paid to the tax authorities. Conversely, companies may be eligible for a refund if the input tax is higher.

What are the penalties for non-compliance with UAE VAT regulations?

Non-compliance with UAE VAT regulations can result in various penalties. These may include fines for late registration, late filing of VAT returns, or failure to pay the VAT liability on time. Businesses need to be aware of their VAT obligations, maintain accurate records, and adhere to the filing and payment deadlines to avoid potential penalties.