Definition

The VAT Threshold is the level of annual taxable supplies that determines whether a business must register for VAT in the UAE.

Key points

• Mandatory registration: AED 375,000.
• Voluntary registration: AED 187,500.
• Thresholds are calculated on a rolling 12-month basis.
• Includes standard-rated, zero-rated, and reverse-charge supplies.

Practical example

A business reaches AED 400,000 in taxable sales in the past year. It must register for VAT as it exceeded the mandatory threshold.

Why it matters

Understanding thresholds helps businesses know when to register and avoid penalties for late registration.