Answer:
In the UAE, a business must register for VAT if its taxable supplies and imports exceed AED 375,000, either in the past 12 months or are expected to exceed this threshold in the next 30 days. This is the mandatory registration threshold set by law.
A business may voluntarily register for VAT if:
- Its taxable supplies or taxable expenses exceed AED 187,500 in the last 12 months, or
- It is expected to exceed this threshold in the next 30 days.
To qualify for voluntary registration, the business must:
- Be carrying on business in the UAE, and
- Intend to make taxable supplies.
Non-residents making taxable supplies in the UAE must register if no UAE recipient is responsible for accounting for the VAT.
Basis:
- Article 13, Article 17, Article 18 Federal Decree-Law No. 8 of 2017;
- Article 7, Article 8 Cabinet Decision No. 52 of 2017
Example:
1. A company based in Abu Dhabi made taxable supplies worth AED 450,000 over the past 12 months. All supplies are subject to VAT. Since the value of taxable supplies exceeded the mandatory registration threshold of AED 375,000, the company must register for VAT.
2. A ...