My sales were AED 400,000 last year. Do I need to register for VAT?

Article 7 – Mandatory Registration 7 1. The Mandatory Registration Threshold shall be AED 375,000 (three hundred and seventy-five thousand dirhams). 2. The Person required to register for Tax pursuant to the provisions of the DecreeLaw must file a Tax Registration application with the Authority within 30 (thirty) days of being required to register. 3. Where a Person does not file his Tax Registration application despite being required to, the Authority shall register that Person with effect from the date on which the Person first became liable to be registered for Tax and impose the necessary penalties in accordance with the Tax Procedures Law. 4. Where supplies made by a Person exceed, in accordance with the Decree-Law, the Mandatory Registration Threshold during the previous 12-month period, the Authority shall register the Person with effect from the first day of the month following the month in which the Person is required to register, whether or not he applies for Tax Registration, or from such earlier date as agreed between the Authority and the Person. 5. Where a Person expects that his supplies, in accordance with the Decree-Law, will exceed the Mandatory Registration Threshold during the next 30 (thirty) days, the Authority shall register him with effect from the date on which there are reasonable grounds for believing the Person will be required to register for Tax as specified in this Clause, whether or not he so notifies them of the liability to register for Tax, or from such earlier date as agreed between the Authority and the Person. 6. Where a Person is not a resident of the State and is required to register for Tax in accordance with the provisions of the Decree-Law, the Authority shall register him with effect from the date on which he started making supplies in the State, whether or not he so notifies them of the liability to register for Tax, or from such earlier date as agreed between the Authority and the Person. 7 Article amended as per Cabinet Decision No. 100 of 2024. Cabinet Decision No. 52 of 2017 and its amendments – Unofficial translation 6 7. A Taxable Person who has been late in registering for Tax according to the provisions of this Article is liable to account for and pay to the Authority the Due Tax on all Taxable Supplies and Imports made by him before registering.

imports in the UAE, unless there is another person in the UAE who is responsible for accounting for VAT on such activities. The main categories of supplies and imports that need to be taken into account for the purposes of VAT registration thresholds are: 1. Supplies of goods or services made in the UAE in the course of business. 2. Any goods or services that the person has imported into the UAE that would have been subject to VAT had they been supplied in the UAE. The person should not include the value of any supplies which are exempt from VAT in this calculation. The person should also not include the value of any one-off supply of a capital asset when calculating the total value of taxable supplies for VAT registration purposes. Example 2 On 15 January, ABC LLC, a business resident in the UAE, made AED 275,000 of taxable supplies and AED 135,000 of exempt supplies in the previous 12month period. Since the total value of their taxable supplies is less than the Mandatory Registration Threshold, they would not be obliged to become VAT registered. On 20 January ABC LLC sold additional AED 200,000 of taxable supplies. As the combined value of their taxable supplies in the previous 12-month period exceeds the Mandatory Registration Threshold, ABC LLC is required to register for VAT. ABC LLC exceeds the Mandatory Registration Threshold of AED 375,000 and they would be required to notify the FTA of their requirement to register for VAT. Example 3 On 1 March, XYZ LLC, a business resident in the UAE, is not required to register for VAT since the value of their supplies and imports over the previous 12-month period does not exceed the registration threshold. On 1 March, they enter into a contract to provide AED 5,000,000 of taxable supplies on 15 March. As XYZ LLC expects to receive supplies in excess of the Mandatory Registration Threshold within the next 30 days, they have an obligation to notify the FTA of their requirement to register for VAT. 12 VAT Guide | Taxable Person | VATG001