When do I have to register for VAT in the UAE?

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.

Article 17 - Voluntary Registration Any Person who is not obligated to apply for Tax Registration according to this Chapter may voluntarily apply for Tax Registration in the following cases: 1. If he proves, at the end of any given month, that the total value of supplies referred to in Article 19 of this Decree-Law or the expenses which are subject to Tax and were incurred during the previous 12-month period, has exceeded the Voluntary Registration Threshold. 11 Article amended as per Federal Decree-Law No. 18 of 2022. Federal Decree-Law No. 8 of 2017 and its amendments – As published by the Ministry of Finance 12 2. At any time that he anticipates that the total value of supplies stipulated in Article 19 of this Decree-Law or the expenses which are subject to Tax that will be incurred during the following 30-day period, will exceed the Voluntary Registration Threshold.

Article 8 – Voluntary Registration 9 1. The Voluntary Registration Threshold shall be AED 187,500 (one hundred and eighty-seven thousand five hundred dirhams). 2. Where a Person voluntarily applied for Tax Registration in accordance with the provisions of the Decree-Law, the Authority shall register a Person with effect from the first day of the month following the month in which the application is made, or from such earlier date as may be requested by the Person and agreed by the Authority. 3. Where a Person voluntarily applied for Tax Registration due to his expectation that his supplies under the provisions of the Decree-Law will exceed the Voluntary Registration Threshold during the next 30 (thirty) days, he should be able to provide evidence of an intention to make Taxable Supplies or incur Taxable Expenses in excess of the Voluntary Registration Threshold. 4. The Authority shall determine the evidence it may deem necessary to demonstrate eligibility for voluntary Tax Registration. 5. For the purpose of voluntary Tax Registration, the phrase “Taxable Expenses” means expenses which are subject to the Standard Rate and which are incurred in the State by a Person who has a Place of Residence in the State. 6. A Person may not register for Tax voluntarily unless he proves to the Authority that: a. he is carrying on a Business in the State, and b. he has the intention to make any of the supplies specified in paragraphs (a), (b) or (c) of Clause 1 of Article 54 of the Decree-Law. 9 Article amended as per Cabinet Decision No. 100 of 2024. Cabinet Decision No. 52 of 2017 and its amendments – As published by the Ministry of Finance 7

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

2.4.2. Voluntary registration Voluntary registration is an option available to businesses which do not have a turnover in excess of the mandatory registration threshold but would still like to be registered for VAT. A person can voluntarily register for VAT if:7 • • at the end of any month, the total value of the person’s taxable supplies and imports, or their expenses which were subject to VAT, in the previous 12 months exceeded AED 187,500; or the total value of the person’s taxable supplies and imports, or their expenses which are subject to VAT, is expected to exceed AED 187,500 in the next 30 days. It should be noted that a non-resident person is not allowed to voluntarily register on the basis of its “taxable expenses”. 2.5. Place of supply For a supply to be within the scope of the UAE VAT regime, the supply needs to take place in the UAE. If a supply takes place outside the UAE, the supply is treated as outside the scope of UAE VAT and therefore UAE VAT will not apply. Furthermore, such an out of scope supply would not count for the purposes of the registration thresholds discussed above. In order to assist businesses in determining where a supply takes place, the VAT legislation provides a number of “place of supply” rules. These rules are different for goods and services, and may vary depending on a set of specific facts. The specific rules applicable to supplies of goods and services in e-commerce arrangements are discussed in the subsequent parts of this Guide. 2.6. Reverse charge mechanism Under the default VAT rule for accounting for VAT, a supplier of goods or services is liable to account for VAT on any taxable supply, irrespective of whether the supplier is a UAE resident or not. The “reverse charge mechanism” is a simplification measure which allows nonresident suppliers to avoid the need to register for VAT in the UAE when they make supplies of goods or services in the UAE to registered persons. Where the reverse charge mechanism applies, the non-resident supplier will not charge VAT to the recipient. Instead, the VAT-registered recipient must self-account for the VAT in respect of the goods or services received. This means that the recipient must record the VAT on the acquisition as output tax at the applicable rate in their systems and declare it in their VAT return. This output tax may then be recovered by 7 Article 17 of the Decree-Law and Article 8 of the Executive Regulation. 7