The short answer
A UAE business must register for VAT when taxable supplies and imports exceed AED 375,000 over the last 12 months, or are expected to within 30 days. It may register voluntarily from AED 187,500. Registering late costs AED 10,000, and VAT becomes due from the date you should have registered.
When is VAT registration mandatory?
When your taxable supplies and imports pass AED 375,000 in the previous 12 months, or you expect them to pass it in the next 30 days (Federal Tax Authority). Zero-rated sales count toward the threshold; exempt sales do not. You then have 30 days to apply. Track the figure on a rolling 12-month basis, not by calendar year: a business that bills AED 40,000 a month crosses the line in its tenth month.
Should I register voluntarily?
Often yes, if your taxable supplies or your taxable expenses exceed AED 187,500 (Federal Tax Authority). Registration lets you recover the 5% VAT on fit-out, equipment and professional fees, which helps a new business with heavy setup costs. The trade-off is a quarterly return and VAT on your invoices, which matters if your customers are consumers or businesses that cannot recover it.
“The amended law will come into effect on 1 January 2026.”
What does it cost to register late?
A fixed AED 10,000 penalty, set when Cabinet Decision No. 49 of 2021 cut it from AED 20,000 (EY summary of the decision). The larger cost is the tax itself: VAT is due on every taxable supply from the date you should have registered, even though you never charged it to customers. On AED 600,000 of sales that is AED 30,000 at 5%. Since 14 April 2026, unpaid tax also accrues a late-payment penalty at an annualised 14%, charged monthly (Al Tamimi summary of Cabinet Decision No. 129 of 2025).
How does the registration process work?
You apply online through the FTA's EmaraTax portal and receive a 15-digit Tax Registration Number (TRN) once approved. The FTA does not charge for registration. We handle it in five steps:
- Eligibility check: turnover, activity and whether mandatory or voluntary rules apply.
- Documents: trade licence, owner and signatory IDs, constitutional documents, 12 months of turnover evidence, bank details.
- Application on EmaraTax, including customs details if you import.
- Answering any FTA clarification request quickly.
- Setting up compliant invoices and your first return before the first period closes.
What changed for VAT-registered businesses in 2026?
Two things matter for most registrants. Excess input VAT can now be carried forward and claimed for only five years, after which it is lost, and refund claims must be made within five years from the end of the period the balance arose in (Ministry of Finance). Self-invoicing is also no longer required for reverse-charge imports used in the business (PwC summary of Federal Decree-Law No. 16 of 2025). Both took effect on 1 January 2026.
Do non-resident businesses need to register?
Yes, usually from the first taxable supply. The AED 375,000 threshold does not apply to foreign businesses (Federal Tax Authority). The main exception is where the UAE customer accounts for the VAT under the reverse-charge mechanism, as most VAT-registered business customers do for imported services.
Frequently asked questions
Is there a fee for VAT registration?
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No. The FTA does not charge for registration. Advisers charge for preparing and managing the application.
How long does it take to get a TRN?
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Often a few weeks if the application is complete; clarification requests from the FTA add time. Apply as soon as you cross the threshold.
Can I deregister if sales fall?
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Yes, if taxable supplies fall below the voluntary threshold, or you stop making taxable supplies. Deregistration has its own deadline and a penalty for applying late.
Do free zone companies register for VAT?
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Yes, under the same thresholds. Some designated zones have special rules for goods moving between them.
Sources
- Registration for VAT (mandatory and voluntary thresholds) — Federal Tax Authority. Checked 16 October 2026.
- UAE amends VAT penalty rules (Cabinet Decision No. 49 of 2021: late registration AED 10,000) — EY Global Tax News, 4 June 2021. Checked 16 October 2026.
- UAE introduces comprehensive tax penalty reform, effective 14 April 2026 (Cabinet Decision No. 129 of 2025) — Al Tamimi & Company. Checked 16 October 2026.
- Ministry of Finance to implement amendments to the Tax Procedures Law starting early 2026 (Federal Decree-Law No. 17 of 2025) — UAE Ministry of Finance, 29 November 2025. Checked 16 October 2026.
- UAE: Significant legislative updates to tax procedures, VAT and excise tax laws (Federal Decree-Laws No. 16 and 17 of 2025) — PwC Middle East. Checked 16 October 2026.