UAE TAX Registration & Compliances

VAT Compliance

As we all know VAT went live in the UAE from 1st January 2018, following are some important aspects to know about this new Tax Regulation

  • If the Annual Turnover of the company is more than AED 375,000/, it is mandatory for the company to register under UAE VAT Law.
  • If the Annual Turnover is between AED 187,500 & AED 375,000/, it is optional for the company to be registered under UAE VAT law.
  • If it is less than AED 187,500/, the company need not register under VAT law.
  • For Startups, if the VAT expenditure goes above AED 187,500/, (USD 50K) the company has to register under the UAE VAT law.


The threshold mentioned above will be calculated as follows:

  • The total value of supplies made by a taxable person for the month in which he is applying for VAT registration and the previous eleven months.
  • The total value of supplies of the subsequent 30 days on which he is applying for VAT registration.
  • If in any of the above two options the turnover is more than AED 375,000/- the company has to register for VAT.
  • For the turnover for VAT registration purpose, value of exempted supply will not be considered.


Who is a Taxable person under GCC VAT Agreement?

  • Any person who is conducting an economic activity for the purpose of generating Income has to register for VAT as per the registration threshold in the defined state.
  • The total value of supplies of the subsequent 30 days on which he is applying for VAT registration.
  • Taxable person may include businesses located outside the GCC territory.
  • Taxable person may be any individual person conducting an economic activity.

Registration for VAT

A taxable person as per the UAE VAT law can register in the third quarter of the year 2017. It is mandatory for every taxable person to get registered under the VAT registration platform before the end of the year 2017.

What is Tax Group / VAT Group?

Member State may allow 2 or more person that are residents of the same member state to register for VAT as a Tax Group. Such group will be treated as a single taxable person for compliance of UAE VAT law. Entities can register as VAT Group if;

  • Each person has a place of establishment or a fixed establishment in the UAE.
  • Those person are “related parties” and
  • Either one person controls other, or two or more persons from the partnership controls the other

Entities within one VAT Group are treated as one entity for the UAE VAT purpose.

Supplies made between members of a VAT Group will not be considered as a transaction under UAE VAT. Further, one entity cannot be part of more than one VAT group.

Record Keeping

It is mandatory for every taxable person to maintain books of accounts under UAE VAT law, In addition to that the authority can ask for additional documents such as, annual accounts, general ledger, purchase day book, invoices issued, invoices received, credit notes, debit notes, VAT Ledger etc.

Under the UAE VAT law the books of accounts and records are to be maintained for five years.

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Documents required for UAE VAT Registration.

•   Trade License
•   Certificate of Incorporation/ Registration Certificate (as applicable)
•   Articles of Association/ Partnership Agreement or any other document
     showing ownership information about the business
•   Copy of Passport and Emirates ID of all Owners
•   Details of manager
•   Copy of Passport and Emirates ID of the Manager
•   Physical office location of the Business
•   Contact details
•   Bank Account details
•   List other business(es) of the directors/ partners in UAE in last five years
     along with their Trade License copies
•   Declaration about the following:
      »  Business activities of the applicant
      »  Actual or estimated financial transaction values
      »  Turnover in last 12 months with supporting documents
      »  Details about expected turnover in next 30 days
      »  Details about expected exempt supplies
      »  Imports and Exports
      »  GCC activities of the Business
      »  Details about Customs registration information

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