Registration is mandatory once taxable supplies and imports exceed AED 375,000, measured over the previous 12 months or expected in the next 30 days. Registration is voluntary from AED 187,500, on the same basis, and taxable expenses count towards the voluntary test. The standard rate is 5%.
Chart data
| Threshold | Amount |
|---|---|
| Voluntary registration from | AED 187,500 |
| Mandatory registration at | AED 375,000 |
The 12-month test is rolling, not annual
This is the detail that catches growing businesses. The mandatory test looks at the previous 12 months at any point, not at your financial year. A consultancy that billed AED 28,000 a month through 2025 and then signed one AED 90,000 project in March crosses the line in March, regardless of where its year end sits. Checking once a year, at year end, is how businesses discover they should have registered months earlier.
The 30-day test looks forward
You must also register if you expect to pass the threshold in the next 30 days. A signed contract that will be invoiced next month can trigger this on its own. For a business that has just won something much larger than its usual work, the obligation can arrive before the money does.
Voluntary registration, and why a small business might want it
Below AED 375,000 but above AED 187,500, registration is a choice, and taxable expenses count towards that test as well as sales. That matters for a business that spends before it earns: a studio fitting out premises, or a trading company buying stock ahead of its first season, may qualify on expenses alone.
The case for registering early is input tax on those costs. The case against is that you take on the whole compliance cycle: returns every tax period, invoices in the required form, and records to support them. Before volunteering, it is worth pricing the filing work for a year against the input tax you would actually recover.
What "taxable supplies" does not mean
It is not your bank deposits, and it is not every invoice you raise. It is the value of supplies that fall within the scope of VAT, plus imports. Businesses with a mix of standard-rated, zero-rated and exempt activity cannot read the threshold off a sales report, and that is a reasonable point to involve an accountant rather than guessing. Getting the classification wrong in either direction is expensive: register late and you have a compliance problem, register unnecessarily and you have bought yourself four returns a year.
After you cross it
Once registered, the standard tax period is three calendar months, unless the FTA assigns you another one, and each return with its payment is due 28 days after the period ends. In money, published prices for having returns prepared start at from AED 499, and most small businesses fold the work into a monthly bookkeeping fee of AED 500–2,500 a month.
Where to check your own position
The FTA's registration page is the authority on both thresholds, and registration itself runs through EmaraTax. If your turnover is near either number, run the 12-month total on the last day of each month rather than once a year. It takes a minute and it is the only way the rolling test stays visible.