VAT Registration locally: Do You Need It?

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When is VAT registration mandatory?

VAT registration with the local tax authority is mandatory when your taxable supplies and imports exceed AED 375,000 in a 12-month period. This is the mandatory registration threshold.

Voluntary registration is available if your taxable supplies exceed AED 187,500. Voluntary registration can be useful if you want to reclaim input VAT on business expenses.

How to register

1. Create an tax authority account — Register on the tax authority portal (tax.gov.ae) with your trade license and company details.
2. Complete the application — Provide business details, activity information and financial data.
3. Submit supporting documents — Trade license, bank details, financial records and authorization letter.
4. Receive your TRN — Once approved, you receive a Tax Registration Number (TRN) and can begin charging VAT.

VAT rates locally

• Standard rate: 5% on most goods and services
• Zero rate: 0% on exports, international transport, certain education and healthcare services
• Exempt: Certain financial services, residential property, bare land and local passenger transport

Filing your first return

VAT returns are filed quarterly with the tax authority. Your first return covers the period from your registration date to the end of that quarter. The return must be filed and any VAT paid within 28 days of the quarter end.

Late filing and late payment attract penalties from the tax authority. The penalty for late registration can be AED 20,000. Having a registered tax agent ensures you never miss a deadline.

Not sure if you need to register? Contact us for a free assessment — we'll review your revenue and advise whether registration is mandatory, voluntary or not yet required.