In the UAE, businesses must determine their eligibility for Value Added Tax (VAT) registration based on specific criteria outlined by the Federal Tax Authority (FTA). The registration requirements are as follows:

1. Mandatory Registration:
   • Annual Taxable Supplies:Businesses are required to register for VAT if their annual taxable supplies and imports exceed AED 375,000. This threshold includes all taxable sales of goods and services made by the business.
   • Economic Activity by Government Entities:Government entities that engage in economic activities must also register for VAT, regardless of their revenue levels.
2. Voluntary Registration:
   • Annual Taxable Supplies Between AED 187,500 and AED 375,000:Businesses with taxable supplies and imports between AED 187,500 and AED 375,000 can opt for voluntary registration. This option allows them to reclaim VAT on their business expenses and benefit from VAT credits.
3. Group Registration:
   • Related Entities:Entities that are closely related and meet specific criteria can apply for VAT group registration. This allows businesses within the same group to consolidate their VAT reporting and payments, simplifying compliance.
4. Non-Resident Businesses:
   • Engaging in Taxable Supplies:Non-resident businesses that conduct taxable activities in the UAE must register for VAT, regardless of their turnover. This ensures they comply with UAE VAT regulations for any business conducted within the country.

SECTORS EXEMPTED  FROM VAT- 1st

VAT exemptions apply to various goods and services in the UAE, including:

• Certain Financial Services:Specific financial activities are exempt as outlined in the VAT legislation.
• Residential Properties:The sale and lease of properties used solely for residential purposes are not subject to VAT.
• Undeveloped Land:Transactions involving bare land are exempt from VAT.
• Local Passenger Transport:Public transportation services within local areas are exempt from VAT.

These exemptions are designed to reduce the tax burden on essential sectors and services.

DOCUMENTS NEEDED TO REGISTER FOR UAE VAT – 

•  Trade License
•  Identification Documents (passport or Emirates ID)
•  Bank Account Details (recent statement or bank letter)
•  Financial Statements
•  Memorandum of Association (if applicable)
•  Proof of Business Address
•  Business Activities Description

When calculating turnover for VAT registration in the UAE, you need to consider the following types of supplies: – 

• Standard Rate Supplies: Sales of goods and services charged at the standard VAT rate of 5%.
• Zero-Rated Supplies: Transactions where VAT is applied at a 0% rate.
• Imported Goods: The value of goods brought into the UAE.
• Reverse Charge Services: Services subject to VAT under the reverse charge mechanism.

Non-taxable supplies should not be included in the turnover calculation.