VAT Turnover Calculation for Registration in UAE | VAT Calculation UAE

VAT Registration Threshold Calculation in UAE


To determine whether the value of supplies has exceeded the mandatory registration threshold limit or the voluntary registration threshold limit, the following needs to be considered.

  • The value of taxable supply of Goods and Services: Taxable supplies refers to all the supplies of goods and services made in UAE on which VAT is levied at the standard rate of 5% including zero-rated supplies. This does not include the notified supplies which are exempted from VAT.
  • The value of reverse charge Supplies: Reverse charge supplies are those notified supplies on which the recipient or the buyer are required to pay the VAT to the government unlike forward charge, where the supplier will collect VAT from the buyer and pay. The value of such supplies needs to be considered in arriving at the turnover threshold for VAT registration.
  • Imports:The value of taxable goods and services imported on which the importer is liable to pay tax.

Let us understand How to calculate the VAT Turnover threshold with an example

Rose General Stores is a supermarket in UAE, engaged in supply of groceries and all types of household products. They also import certain home furnishing products from other countries and supply it to the customers in UAE as well as export it to other countries. The following are the different types of supplies made by Rose General Stores.

Type of Supplies Turnover in AED
Taxable Supplies (Sale in UAE) 375,000
Exports (Zero-Rated Supplies) 125,000
Exempt Supplies 50,000
Imports 100,000
Reverse Charge Supplies 25,000

To determine Rose General Trader's eligibility for registration in UAE, taxable supplies + exports (zero-rated supplies) + imports + reverse charge supplies should be considered. Exempt supplies will not be considered in arriving at the registration threshold. The registration threshold calculation of Rose General Trader is given below:

Type of Supplies Turnover in AED
Taxable Supplies (Sale in UAE) 375,000
Exports (Zero-Rated Supplies) 125,000
Imports 100,000
Reverse Charge Supplies 25,000
VAT Registration Turnover 625,000

The turnover of Rose General Stores for VAT registration is AED 625,000 which has exceeded the mandatory registration threshold of AED 375,000. Thus, Rose General Stores is required to mandatorily register under UAE VAT .

Exceptional Scenarios for VAT turnover threshold calculation for registration in UAE

Watch video: Getting started with Tally.ERP 9 for GCC VAT compliance

Existing business is acquired

In case, if a person acquires an existing business, only the relevant part of the taxable supplies value that belongs to the said person (who takes over the business) should be considered. The entire supplies made by a person from whom the business is acquired, are not required to be considered. The calculation of turnover for VAT registration will be similar to the calculations discussed above.

Related Parties

Related Parties refers two or more Persons who are not separated on the economic, financial or regulatory level, where one can control the others either by law, through the acquisition of shares or voting rights. In the above case, determining the value of taxable supplies will be detailed in executive regulations of UAE VAT law which are yet to be made available.



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