Mandatory at AED 375,000, voluntary at AED 187,500, filed quarterly by most businesses — and penalised from AED 1,000 when a return is late.
VAT registration becomes mandatory once a business's annual taxable turnover exceeds AED 375,000. Below that, registration is still available: businesses with revenue above AED 187,500 may register voluntarily, which is often the right call for companies carrying significant recoverable input VAT.
Filing frequency follows size. Most businesses must file VAT returns quarterly, though some larger entities may be required to file monthly. The obligation is calendar-driven, so the practical work is bookkeeping discipline rather than year-end effort.
Missing a deadline has a defined floor. Failure to file VAT returns on time may result in penalties starting from AED 1,000, increasing for repeated offenses. The escalation for repetition is the part most businesses underestimate.
On the recovery side, businesses that incur recoverable input VAT can apply for a refund through the UAE Federal Tax Authority. Refund claims depend on the underlying records standing up to review, which is why VAT filing and record-keeping are best treated as one process rather than two.
General information only — not tax advice. Correct as at August 2026.