Is the AED 375,000 VAT threshold based on profit?

No. The resident-business registration test concerns taxable supplies and imports. It is not the profit remaining after expenses.

Does a corporate tax number also register me for VAT?

No. Corporate tax and VAT have separate registration processes and conditions. Check each obligation independently.

VAT Registration for New UAE Businesses: Thresholds

VAT Registration for a New UAE Business: When to Check

For a UAE-resident business, VAT registration is generally mandatory when taxable supplies and imports exceed AED 375,000 over the previous 12 months or are expected to exceed it in the next 30 days. The test is not simply annual profit or the company’s financial year.

In short

Monitor taxable supplies and imports on a rolling basis.
Voluntary registration has an AED 187,500 threshold, subject to conditions.
Corporate tax registration does not automatically register the business for VAT.

What should you measure?

Track taxable supplies and imports for the VAT test. This is different from checking the balance in your bank account or the profit left after expenses. Ask your accountant how your sales, imports and any special transactions should be treated.

The FTA’s registration guidance sets out the previous-12-month and next-30-day tests. Put a recurring review in your bookkeeping routine rather than waiting until the accounts are prepared at year-end.

Can a new business register voluntarily?

Voluntary registration may be available when taxable supplies, imports or taxable expenses exceed AED 187,500 in the relevant past or expected period, subject to the rules. It is an option to assess, not a reason to assume every startup should register immediately.

Consider the expected sales, expenses and administrative work together. Keep evidence supporting any forecast used in the application.

A simple way to organise the check

Maintain a monthly record of sales and imports.
Identify how each revenue stream is treated for VAT.
Review the rolling total and upcoming contracted work.
Record the date a registration obligation arises.
Prepare the application and supporting evidence promptly.

What if a large contract changes the forecast?

Imagine a young consultancy wins a contract that materially changes the next month’s expected taxable supplies. Check the forward-looking test then, rather than waiting for twelve months of trading. Discuss how the contract and supply dates affect the position with an accountant.

The FTA’s VAT registration service explains application requirements and the registration deadline. Non-resident businesses have different threshold rules, so do not apply the UAE-resident test automatically to an overseas seller.

Keep VAT and corporate tax separate

They are different registrations with different tests. A free zone address or an expectation of no corporate tax payable does not settle VAT. Our accounting and tax coordination service can help organise the records and questions for your business.