Value Added Tax

The introduction of taxes in the UAE is part of a GCC-wide initiative to diversify regional economies. Given the overall reduction in oil prices in recent years, it has been necessary for the GCC member states to explore other revenue raising measures and reduce dependency on hydrocarbons as the key contributor to the public purse. As a result, the GCC member states have agreed to sign unified framework agreements for the implementation of VAT and Excise taxes. Member states will also implement their own domestic legislation that will govern the introduction of these taxes.

UAE’s citizens and residents enjoy exceptional public services, such as healthcare, roads, education, parks, social services and waste management. The full cost of these services is paid for by the government . The introduction of VAT and Excise taxes will help the UAE diversify sources of revenue so that government departments can continue to deliver excellent public services and ensure a high quality of life for coming generations. This is also in line with a key pillar of the UAE's Vision 2021 – The Sustainability of Infrastructure – more information about which can be found

Any business which exceeds mandatory or voluntary registration thresholds may be required or may be able to register for VAT

he definition of business embraces most forms of activity and includes any activity conducted regularly or on an ongoing basis, e.g. industrial, commercial, professional, trade, etc

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Mandatory Registration

A business must register if:

  • The total value of their taxable supplies made within the UAE exceeds the mandatory registration threshold over the previous 12 month period, or
  • They anticipate making taxable supplies with a value exceeding the mandatory registration threshold in the next 30 days.
  • The mandatory registration threshold will be AED 375,000.

Voluntary Registration

A business may apply to register if they do not meet the mandatory registration criteria and:

  • The total value of their taxable supplies or taxable expenditure in the previous 12 months exceeds the voluntary registration threshold, or
  • They anticipate that the total value of their taxable supplies or taxable expenditure will exceed the voluntary registration threshold in the next 30 days.
  • The voluntary registration threshold will be AED 187,500.