Mandatory VAT Registration — Thresholds and Triggers
Learn the mandatory registration threshold of AED 375,000 and the triggers that require VAT registration.
Mandatory Registration
A business must register for VAT if its taxable supplies exceed the mandatory threshold.
The Threshold
AED 375,000 in taxable supplies over the previous 12 months, or
Expected to exceed AED 375,000 in the next 30 days.
A business meeting this threshold must register within 30 days of the end of the 12-month period or the 30-day window.
What Counts as Taxable Supplies?
Taxable supplies include all standard-rated (5%) and zero-rated (0%) supplies. Exempt supplies do not count toward the threshold.
Retrospective vs Forward-Looking Tests
Retrospective test: Total taxable supplies in the previous 12 months exceed AED 375,000.
Forward-looking test: Reasonable expectation that taxable supplies will exceed AED 375,000 in the next 30 days.
If either test is met, mandatory registration applies.
Non-Resident Businesses
Non-resident businesses making taxable supplies in the UAE must also register, regardless of the threshold, unless they are already registered in another GCC implementing state.
Practical UAE example
**Sharjah Trading Company**: A trading company had AED 420,000 in taxable supplies in the last 12 months. This exceeds the AED 375,000 threshold, so the company must register for VAT within 30 days of the end of that 12-month period. If the company had only AED 350,000 in supplies but signed a contract expected to generate AED 50,000 in the next 30 days, the forward-looking test would also trigger registration.
Key takeaways
Mandatory threshold: AED 375,000 in taxable supplies over 12 months.
Registration must be completed within 30 days.
Both retrospective and forward-looking tests apply.
Non-residents making UAE taxable supplies must also register.
Authoritative sources
Federal Decree-Law No. 8 of 2017 on Value Added Tax
United Arab Emirates — Federal Tax Authority · The VAT Law — Articles 1 to 82 (as amended by Federal Decree-Law No. 18 of 2022)
Effective: 1 Jan 2018Verified: 5 Oct 2026View source
Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree-Law No. 8 of 2017 on VAT
United Arab Emirates — Cabinet / Federal Tax Authority · Executive Regulations (as amended by Cabinet Decisions No. 46/2020, 24/2021, 88/2021, 99/2022, 100/2024, and 100/2025)
Effective: 1 Jan 2018Verified: 5 Oct 2026View source
This lesson is general educational content, not individualized tax or legal advice. Always consult a qualified professional for your specific situation.