A new company does not need 12 months of trading history to register for VAT. UAE VAT rules look both back over the past 12 months and forward over the next 30 days. That means a new business can, and sometimes must, register as soon as it expects to pass the threshold.

This guide explains when a new company must register, when it can choose to register voluntarily, and the proof the Federal Tax Authority (FTA) asks for.

When a New Company Must Register for VAT

Registration is mandatory if the company's taxable supplies and imports:

  • exceeded AED 375,000 over the past 12 months, or
  • are expected to exceed AED 375,000 within the next 30 days.

The second test is the one that catches new companies. If you sign a large contract in your first month that will take you over AED 375,000 within 30 days, you must register, even though you have only just started.

Once you become required to register, you must apply within 30 days. Applying late leads to a late registration penalty.

When a New Company Can Register Voluntarily

A UAE company that makes taxable supplies can choose to register if its taxable supplies, imports or taxable expenses in the past 12 months, or expected in the next 30 days, exceed AED 187,500.

Including expenses is important for new companies. A business that spends heavily on set-up costs, such as fit-out, equipment or stock, may pass AED 187,500 in expenses before it makes many sales.

Why register voluntarily?

  • Recover input VAT on set-up costs and purchases, which can improve cash flow in the early months.
  • Look established to larger customers who prefer to deal with VAT-registered suppliers.
  • Be ready before you hit the mandatory threshold.

What to weigh up

  • You must charge 5% VAT on your taxable sales, which may matter if your customers are individuals who cannot recover VAT.
  • You must file VAT returns and keep VAT records from the date of registration.

Proof the FTA Asks For

A new company has little sales history, so the FTA relies on supporting evidence. According to the FTA's VAT registration service, applicants should provide, as applicable:

  • A turnover declaration letter showing total taxable supplies and monthly sales from establishment to the application date, stamped and signed by the authorised signatory. The FTA provides a template form.
  • For expected revenue: valid documents such as purchase orders or contracts, stamped and signed by both parties.
  • For registration based on expenses: at least five VAT invoices with amounts exceeding the registration threshold.
  • Supporting documents such as invoices, local purchase orders, lease agreements or completion certificates.

Plus the standard documents: trade licence, incorporation documents or memorandum of association, Emirates ID and passport copies of owners and signatories, and a power of attorney where needed. Files must be PDFs of up to 15 MB each.

If your company trades goods in a designated zone, the FTA may also ask for a business flow showing how your goods move and your supply chain.

How to Register

  1. Work out your numbers. Total your taxable supplies, imports and expenses for the past 12 months and the next 30 days.
  2. Collect your evidence. Prepare the turnover declaration and the contracts, purchase orders or invoices that support it.
  3. Apply on EmaraTax. Create a taxable person profile and click "Register" under Value Added Tax. The FTA estimates about 45 minutes to complete the form.
  4. Wait for approval. The FTA lists 20 business days from receipt of a complete application. Registration is free.
  5. Start charging VAT from your effective registration date, and set up your invoices and records.

For the full step-by-step guide, read how to register for VAT in the UAE. After registration, see how to file a VAT return.

Frequently Asked Questions

Can a new company register for VAT without 12 months of sales?

Yes. A new company can register based on expected supplies, imports or expenses in the next 30 days, supported by contracts, purchase orders or invoices.

What is the voluntary VAT registration threshold?

AED 187,500 in taxable supplies, imports or taxable expenses, in the past 12 months or expected in the next 30 days.

How long does a new company have to register once it passes AED 375,000?

30 days from the date it becomes required to register.

Do branches of a new company register separately?

No. All branches are registered under one Tax Registration Number, and one VAT return covers all branches.

Note: This article provides general information only and is not tax advice. Confirm the current requirements with the Federal Tax Authority or a qualified tax professional.