VAT Registration in UAE

Value Added Tax (VAT) is an indirect tax applied at each stage of the supply chain. Businesses must complete VAT registration in UAE through the Federal Tax Authority (FTA) to collect and remit VAT legally. The standard rate is 5%.

Introduced on 1 January 2018, VAT helps diversify the UAE’s revenue sources beyond oil and gas. It funds essential public services like healthcare, education, and infrastructure, and aligns the country with global economic practices, used by over 180 nations.

VAT requires businesses to accurately collect, report, and pay taxes, making strong financial management or expert help essential. The FTA oversees the VAT system to ensure all companies meet their tax obligations.

We also assist with the online VAT registration process, called e-VAT, simplifying compliance and helping your business stay on track with FTA requirements.

What is a Tax Registration Number (TRN)?

A TRN is a unique VAT registration number issued by the Federal Tax Authority (FTA) to businesses registered for VAT. This number must be displayed on all VAT invoices and related documents.

To find your VAT registration number, registration date, or to check the status of your VAT application:

• Log in to your EmaraTax e-Services account.
• Navigate to the dashboard or “Registration Overview” section.
• Here you will see if your application is pending, approved, or rejected.
• Once approved, your effective registration date and TRN will be displayed.
• You can also download your VAT registration certificate from this portal.

This is the official way to track your VAT registration details.

Every business must know the VAT registration criteria. The specific operations you carry out will be judged by the official rules to see if you must register for VAT in the UAE. The requirement will depend mostly on your VAT turnover figure. The FTA VAT registration thresholds determine whether registration is mandatory or voluntary.

• Businesses must register for VAT if taxable supplies and imports exceed AED 375,000 annually or are expected to within 30 days. Foreign businesses may also be required to register if no local party accounts for VAT.
• Businesses can register voluntarily if taxable sales, imports, or expenses exceed AED 187,500. This is useful for startups to reclaim VAT on costs, improve cash flow, and boost credibility, even before making any sales.

VAT Registration for New Companies in the UAE

If you’ve just launched a new business, understanding VAT registration for new company in UAE is vital. Newly formed companies must monitor expected taxable turnover from the start to determine if VAT registration is required.

Even if your new company hasn’t yet crossed the AED 375,000 threshold, voluntary registration can be beneficial. It allows you to reclaim input VAT on setup costs and enhances your company’s professional image.

Safe Ledger offers specialized VAT registration services in UAE designed for startups and new business setups — ensuring you register accurately, on time, and in line with VAT registration requirement in UAE set by the Federal Tax Authority (FTA).

Calculating Taxable Turnover

To determine if a business needs to register for VAT in the UAE, it must calculate its taxable turnover. This includes standard-rated supplies (5%), zero-rated supplies (0%), imports, and any reverse charge supplies if applicable. Exempt supplies are not counted in this calculation. Businesses also need to monitor whether they are likely to exceed the vat registration threshold UAE within the next 30 days, which requires careful financial tracking and forecasting.

Example:

If your business sells goods worth AED 300,000 at the standard 5% VAT rate, provides zero-rated services worth AED 50,000, and imports goods worth AED 30,000 in a year, your taxable turnover is AED 380,000. Since this exceeds the mandatory VAT registration threshold of AED 375,000, you must register for VAT. Additionally, if you expect your taxable turnover to cross this threshold within the next 30 days, you should register immediately.

Vat Registration Requirements

The primary reasons for VAT registration include:

• Legal Compliance: It ensures businesses operate legally, avoiding significant penalties.
• Business Legitimacy: A Tax Registration Number (TRN) enhances credibility with customers, suppliers, and government bodies.
• Input VAT Recovery: It allows businesses to reclaim the VAT paid on their eligible business expenses.

The dual threshold (voluntary and mandatory VAT thresholds) system offers flexibility but demands careful monitoring. Businesses must weigh the benefits of input VAT recovery against administrative tasks.

Engaging in VAT registration does more than fulfill legal obligations. It brings several practical and strategic advantages that benefit your business long term.

1. Reclaim Input VAT to Cut Costs

One of the biggest benefits of VAT registration is the ability to reclaim input VAT (paid on business purchases). Registered businesses can recover the VAT paid on eligible goods and services, helping reduce operational costs and improve cash flow. This is especially valuable for businesses with high setup or ongoing expenses.

2. Boost Credibility and Market Reputation

Holding a Tax Registration Number (TRN) shows that your business complies with UAE tax laws. It adds professionalism and builds trust with clients, suppliers, and banks. Many financial institutions and large corporations require a TRN as part of their KYC process.

3. Avoid Penalties for Non-Compliance

Timely VAT registration helps avoid heavy penalties for non-registration or late compliance. Taking a proactive approach not only saves money but also protects your business from reputational harm.

4. Strengthen Financial Management

VAT registration requires businesses to maintain accurate records. This improves overall financial organization, supporting better decision-making and long-term planning.

5. Access Bigger Opportunities

Only VAT-registered businesses can legally charge VAT on taxable supplies. For SMEs, voluntary registration can help attract larger clients and access new markets where being VAT-compliant is a requirement.

Whether you’re establishing your business on the UAE Mainland or in a UAE Freezone, VAT registration is one of the first compliance steps after securing your trade license.

Safe Ledger provides complete Business Setup Services in the UAE, including licensing, VAT registration, and corporate bank account setup — ensuring your business is legally ready to operate from day one.

VAT and Corporate Tax: Integrated Tax Compliance

• Many businesses now fall under both the Corporate Tax framework and the VAT system.
• Our integrated tax approach ensures accurate filing for both profit-based and transaction-based taxes. We align your VAT records with corporate tax returns to avoid discrepancies and FTA penalties.
• Whether you’re registering a new company or managing existing accounts, Safe Ledger simplifies every aspect of UAE tax compliance under one roof.

Ongoing VAT Compliance & Accounting Support

• After VAT registration, businesses must maintain accurate records and file returns on time.
• Our Compliance Services include complete VAT bookkeeping, FTA audit preparation, and return filing.
• We help ensure your VAT data aligns with your accounting and corporate tax obligations  preventing costly errors and delays.

VAT for Freezone vs Mainland Companies

• VAT Registration differs for UAE Freezone business setups and Mainland business setup.
• Some designated freezones enjoy zero-rated benefits, while mainland entities are subject to standard VAT.
• Our advisors assess your setup location and structure to determine the most VAT-efficient model during your Business Setup in the UAE process.

VAT Assistance for Foreign Investors

• Foreign investors often need additional support to register for VAT and meet local compliance obligations.
• Our team assists with VAT and tax registration for non-resident entities during UAE company formation ensuring your business is recognized and compliant with FTA requirements from the start.
• Whether you plan to establish in the Mainland or a Freezone, Safe Ledger makes the process seamless.

Need help understanding the legal and tax steps? Read our expert article on How to Start a Business in the UAE as a Foreigner for everything you need to know.

The UAE's VAT system offers different types of registration to suit various business scenarios.

1. Mandatory VAT Registration: Businesses must register for VAT if their taxable supplies and imports exceed AED 375,000 annually or are expected to do so within the next 30 days. This ensures full compliance with UAE tax regulations.
2. Voluntary VAT Registration: If a business’s taxable turnover or expenses fall between AED 187,500 and AED 375,000, it can voluntarily register. This is ideal for startups or companies with high setup costs, as it allows early input VAT recovery and builds tax credibility.
3. Exception from VAT Registration: Businesses dealing exclusively in zero-rated supplies (e.g., exports) can apply for an exception from registration, even if they exceed the mandatory threshold. While this reduces compliance requirements (no tax returns), it also means the business cannot reclaim input VAT, a tradeoff between simplicity and savings.
4. VAT Group Registration: Two or more related legal entities under common control or ownership can apply for group VAT registration under a single TRN.
   This structure eases mostly VAT-exempt intra-group transactions but can complicate VAT reporting when moving goods between designated zones, the mainland, or different emirates.

Knowing UAE VAT thresholds helps you stay compliant and decide if registration is mandatory or a smart voluntary move. Both mandatory and voluntary thresholds are based on the value of taxable supplies, imports, and relevant expenses, tracked on a 12-month rolling basis or forecasted for the next 30 days.

Mandatory VAT Registration Threshold: AED 375,000

Businesses are required to register for VAT if:

• The total value of taxable supplies and imports exceeds AED 375,000 in the previous 12 months.
• It is expected to exceed AED 375,000 in the next 30 days.

This is the non-optional threshold and applies to most businesses actively trading in the UAE.

Voluntary VAT Registration Threshold: AED 187,500

Businesses can choose to register if:

• Taxable supplies, imports, or taxable expenses are more than AED 187,500 in the past 12 months.
• They are projected to exceed AED 187,500 in the next 30 days.

This is especially useful for startups with early-stage investments or companies preparing for rapid growth.

Rolling 12-Month Monitoring Requirement

Businesses must monitor turnover continuously by:

• Reviewing the past 12 months at the end of each calendar month.
• Checking if the threshold has been crossed.
• Projecting turnover for the next 30 days to comply with the forecasting rule.

What to Include in Turnover Calculations

When calculating whether you meet a VAT threshold, include:

• Standard-rated supplies
• Zero-rated supplies
• Imports
• Reverse charge supplies (if applicable)

Do not include exempt supplies, as they are excluded from VAT registration calculations. Confusing zero-rated and exempt supplies is a common compliance error.

Here’s how to apply for VAT registration in uae:

Step 1: Create an e-Services Account on the FTA Portal. Visit the official FTA website (tax.gov.ae or eservices.tax.gov.ae). Click "Sign Up" and provide the required details, such as email and password, and set up security questions.

An email verification will activate your account for the VAT registration in the UAE portal.

Step 2: Before starting the VAT registration application online, prepare all required documents. This ensures a smooth VAT registration procedure in uae.

Step 3: Complete the Online VAT Registration Form (VAT 101). Log in to your EmaraTax account. Find the option to "Register for VAT". The online VAT registration form typically has several sections. You will need to provide:

• Applicant and business details (legal/trade name).
• Business activities.
• Trade license information.
• Contact and bank account details (company IBAN).
• Turnover figures (last 12 months and expected next 30 days).
• Import/export and GCC activity details.
• A declaration.

Step 4: Scan and upload all required documents. Adhere to specified formats (e.g., PDF, JPG) and file size limits (e.g., 2MB or 5MB). This is a critical part of how to do VAT registration.

Step 5: Carefully check all information and documents for accuracy before submitting the UAE VAT online registration.

Step 6: Await FTA Approval and Receive the Tax Registration Number (TRN). The FTA reviews the application. This usually takes about 20 business days, but it can vary. Faster approval is possible if all required information and documents are accurate and complete.

If approved, you will get a VAT registration number (TRN). The VAT Registration Certificate with the TRN becomes available on your EmaraTax dashboard.

For up-to-date guidance on FTA VAT registration and EmaraTax processes, contact Safe Ledger. We’ll guide you step-by-step to ensure smooth, timely registration and full compliance with UAE tax laws.