What is the VAT threshold in the UAE?
The mandatory VAT registration threshold is AED 375,000 and the voluntary threshold is AED 187,500, both measured on taxable supplies and imports over a rolling 12-month period.
VAT Threshold
VAT Registration Threshold in the UAE
The UAE has two VAT registration thresholds: a mandatory threshold of AED 375,000 and a voluntary threshold of AED 187,500, both measured on taxable supplies and imports.
- Know the mandatory vs voluntary threshold
- Calculate your figure correctly
- Register at the right time
Dubai-based, FTA-aware VAT support for UAE businesses.
Quick Answer
In the UAE, VAT registration is mandatory once your taxable supplies and imports exceed AED 375,000 over the previous 12 months, or are expected to exceed it within the next 30 days. Voluntary registration is available once you exceed AED 187,500 in taxable supplies, imports, or taxable expenses. Both thresholds are calculated on a rolling 12-month basis, not by calendar year.
AED 375,000Mandatory registration threshold
AED 187,500Voluntary registration threshold
12 monthsRolling calculation period
30 daysForward-looking test window
Mandatory vs Voluntary Threshold
The mandatory threshold is AED 375,000: once your taxable supplies and imports cross this over the past 12 months (or you expect to within 30 days), you must register. The voluntary threshold is AED 187,500: if you are above this but below the mandatory level, you can choose to register — often worthwhile for startups that want to recover input VAT on early costs. Voluntary registration can also be based on taxable expenses, not just revenue.
- Mandatory: AED 375,000 (must register)
- Voluntary: AED 187,500 (may register)
- Voluntary can be based on taxable expenses too
How to Calculate Your Threshold
Calculate on a rolling 12-month basis, not the calendar year. Add up your taxable supplies (standard-rated and zero-rated sales), plus imports of goods and services, over the last 12 months. Then run a forward test: if you expect to exceed AED 375,000 in the next 30 days, you are also liable. Exempt supplies are generally excluded from the calculation. Getting this right matters — registering late triggers an FTA penalty.
- Sum taxable supplies over the last 12 months
- Add imports of goods and services
- Run the 30-day forward-looking test
- Exclude exempt supplies from the total
When Should You Register?
Register as soon as you become liable — waiting risks the late-registration penalty. If you are approaching the mandatory threshold, prepare your documents in advance so you can apply the moment you cross it. If you are between the two thresholds, weigh the benefit of recovering input VAT against the added compliance work of filing returns. Exiloz can run the threshold calculation with you and advise on timing.
- 1Monitor your rolling 12-month figure
- 2Prepare documents before you cross the line
- 3Register promptly once liable
- 4Decide on voluntary registration if applicable
UAE VAT Threshold FAQs
Is the VAT threshold calculated by calendar year?
No. It is calculated on a rolling 12-month basis. You also apply a forward-looking test: if you expect to exceed AED 375,000 within the next 30 days, you are liable to register.
What counts toward the VAT threshold?
Taxable supplies (standard-rated and zero-rated sales) and imports of goods and services count. Exempt supplies are generally excluded from the calculation.
Should I register voluntarily at AED 187,500?
Voluntary registration can help startups recover input VAT on setup and operating costs, but it adds filing obligations. Whether it is worthwhile depends on your cost base and plans.
What happens if I cross the threshold and do not register?
Failing to register on time triggers an FTA administrative penalty (historically AED 10,000). Registering promptly once liable avoids it.
Can Exiloz check my threshold for me?
Yes. Exiloz can calculate your rolling taxable turnover, run the forward-looking test, and advise whether and when you need to register.
Not sure if you’ve crossed the VAT threshold?
Exiloz can calculate your rolling taxable turnover and tell you whether VAT registration is mandatory, voluntary, or not yet required.
