🇦🇪 VAT Registration Requirements in the UAE
Selling in the UAE? Whether you're based locally or abroad, VAT compliance is non-negotiable. The UAE takes VAT enforcement seriously—and the penalties for non-compliance are steep. Here's what you need to know to stay on the right side of the law.
🧠Key Information
-
Mandatory VAT registration applies to:
- UAE-based businesses with taxable supplies/imports exceeding AED 375,000/year
- Non-resident businesses making any sales in the UAE
- Voluntary registration is available for UAE-based businesses with turnover above AED 187,500/year
- The Federal Tax Authority (FTA) enforces strict compliance, and penalties apply for late registration, non-filing, and non-payment
⚠️ Important: Selling without a VAT number in the UAE can result in immediate penalties.
⚠️ Penalties for Non-Compliance
| Violation | Penalty |
|---|---|
| Failure to register for VAT | AED 10,000 |
| First missed VAT return filing | AED 1,000 |
| Repeated missed filing (within 12 months) | AED 2,000 |
| Late VAT payment | 2% on day 1, 7% on day 7, 1% per day after day 30 (max 300%) |
đź“ť Required Documents
To register for VAT in the UAE, you’ll need:
- Company Certificate of Incorporation
- Colour copies of all directors’ passports
- Two proofs of personal address for each director (e.g. utility bill, bank statement)
- European VAT certificates (if applicable)
- Screenshot or profile link from Amazon.ae (if selling on Amazon)
- Company stamp for Letter of Intent and Power of Attorney (can be created if not available)
📌 Takeovers: You’ll also need the UAE VAT certificate and login credentials from the previous agent for the FTA online portal.
đź“Š VAT Rates in the UAE
| Rate | Applies To |
|---|---|
| 5% | Standard rate – most goods and services |
| 0% | Exports, international transport, certain healthcare and education services |
| Exempt | Residential property leases, local passenger transport, some financial services |
âť“ Frequently Asked Questions (FAQ)
Do I need to register for VAT if I’m not based in the UAE?
Yes. If you are a non-resident business making sales in the UAE, VAT registration is mandatory from your first sale.
Can I voluntarily register if I don’t meet the AED 375,000 threshold?
Yes. If your taxable turnover exceeds AED 187,500, you may voluntarily register for VAT.
What happens if I miss a VAT return deadline?
You’ll be fined AED 1,000 for the first missed filing and AED 2,000 for repeated missed filings within 12 months. Late payments also incur escalating surcharges.
Can I reclaim VAT on business expenses?
Yes, once registered, you can reclaim input VAT on eligible business expenses, provided you maintain proper documentation.
What if I don’t have a company stamp?
You can create one for the purpose of submitting the required Letter of Intent and Power of Attorney.