VAT registration is required in the United Arab Emirates.
All businesses having a physical presence in the UAE and a value of supply in the member nations that surpassed AED 375,000 in the previous year are required to register for UAE VAT. A company must also register for UAE VAT if it believes that the total value of its supply will surpass the statutory registration limit of AED 375,000 in the next 30 days.
VAT Registration in the United Arab Emirates is done on a voluntary basis.
Every company operating in the United Arab Emirates, regardless of whether or not they are compelled to register for VAT, will be given the chance to voluntarily register for the tax if they so choose. In this particular scenario, the annual supplies or taxable expenditures have to be greater than the cost of voluntary registration in order for it to be permissible. At the moment, the amount of AED 187,500 required for voluntary registration is equivalent to fifty percent of the amount required for statutory registration.
In this country, registration is voluntary and voluntary participation is not mandatory; firms are free to choose whether or not to participate. As a consequence of the inclusion of taxable costs as a factor for assessing eligibility for voluntary registration, the United Arab Emirates Value Added Tax has become open to voluntary registration for all newly established firms. This is due to the fact that even though the turnover or value of supplies may be lower when the firm is first founded, there is a strong likelihood that a significant amount of taxable expenditures were made in the process of establishing the business or during the early phases of operation. The rationale for this is that while the turnover or value of supplies may be lower when the firm is first established, there is a good chance that these expenditures were made. Therefore, the addition of taxable costs as one of the conditions for voluntary registration would make it possible for all new businesses to sign up, even if they did not produce any revenue at all.
Exemption from the requirement to register for VAT
Businesses whose total value of supply in member countries is less than the AED 187,500 voluntary registration level are not permitted to register for UAE VAT in the first place. Furthermore, enterprises that solely make zero-rated goods may apply for exemptions from the requirement to register for VAT.
