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Typical Bookkeeping Cleanup Experiences
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Quick Information
When should you register for Bookkeeping Cleanup
Who is eligible for VAT in UAE?
Can you claim VAT if you are not VAT registered?
Do you need to charge VAT as a sole-trader?
What is the minimum amount for VAT?
When should you register for Bookkeeping Cleanup
You must complete VAT registration in UAE within 30 days after your taxable supplies cross AED 375,000 in the past 12 months or are expected to exceed this threshold in the next 30 days. Voluntary VAT registration becomes an option once you cross AED 187,500 in annual turnover or expenses.
Missing the 30-day registration deadline triggers automatic FTA penalties starting at AED 10,000, plus daily fines for continued delays. Early VAT registration lets you reclaim input VAT on startup costs like equipment, rent, and software purchases made before crossing the mandatory threshold.
Who is eligible for VAT in UAE?
All UAE resident businesses with taxable supplies exceeding AED 375,000 in 12 months must complete mandatory VAT registration. Non-resident businesses making taxable supplies in UAE must register for VAT registration regardless of turnover amount.
Sole traders, freelancers, and startups can opt for voluntary VAT registration in UAE once their annual turnover or business expenses exceed AED 187,500. Businesses below the AED 187,500 threshold cannot register for VAT registration and must operate as non-registered entities.
Can you claim VAT if you are not VAT registered?
No. Only businesses with completed VAT registration in UAE and a valid Tax Registration Number (TRN) can reclaim input VAT on business expenses. Without VAT registration, you pay the full 5% VAT on all purchases with no recovery mechanism.
However, you can reclaim pre-registration input VAT on unused stock and recent service purchases after completing VAT registration, provided you hold valid tax invoices. Tourists and foreign businesses attending UAE exhibitions qualify for special VAT refund schemes without requiring full VAT registration.
Do you need to charge VAT as a sole-trader?
Yes. Once you complete VAT registration in UAE as a sole trader after crossing the AED 375,000 mandatory threshold, you must charge 5% VAT on all taxable supplies. Your VAT registration certificate will show your effective registration date when VAT charging becomes mandatory.
Sole traders with turnover between AED 187,500 and AED 375,000 can choose voluntary VAT registration to reclaim input VAT on business expenses, but this makes charging VAT compulsory. Operating above AED 375,000 without VAT registration risks penalties up to AED 20,000 plus tax recovery on unpaid VAT.
What is the minimum amount for VAT?
The mandatory VAT registration threshold in UAE is AED 375,000 in annual taxable supplies over the past 12 months or expected in the next 30 days. The voluntary VAT registration threshold is AED 187,500 in annual supplies or business expenses.
Businesses below AED 187,500 cannot apply for VAT registration and must wait until they cross the voluntary threshold. Once you exceed AED 375,000, you have exactly 30 days to submit your VAT registration application to FTA or face AED 10,000 penalties.
