UAE VAT Registration: Thresholds, Process and Deadlines
7 min readUpdated 2026-08-01Editorial policyHow we verify
Quick answer
UAE corporate tax is 0% on the first AED 375,000 of taxable profit and 9% above it. Every company must register regardless of profit. VAT registration is mandatory once taxable supplies exceed AED 375,000 in 12 months, and voluntary above AED 187,500.
Thresholds and rates
| Item | Threshold | Rate / action |
|---|---|---|
| Corporate tax | First AED 375,000 profit | 0% |
| Corporate tax | Above AED 375,000 | 9% |
| Corporate tax registration | All companies | Mandatory |
| VAT registration | AED 375,000 supplies | Mandatory |
| VAT registration | AED 187,500 supplies | Voluntary |
| Standard VAT rate | — | 5% |
Free zone qualifying income
A Qualifying Free Zone Person can apply 0% corporate tax to qualifying income, but the conditions are strict: adequate substance in the zone, audited financials, transfer pricing compliance, and no more than a de-minimis share of non-qualifying revenue. Income from mainland customers is generally excluded.
- Maintain real premises, staff and decision-making in the free zone.
- Keep audited accounts even if the zone does not demand them.
- Track mainland-sourced revenue separately from day one.
Deadlines and penalties
- Corporate tax return: within 9 months of the financial year end.
- Late registration penalty: AED 10,000.
- VAT returns: quarterly for most businesses, monthly above AED 150m turnover.
- Records must be retained for 7 years.
Frequently asked questions
- Do free zone companies pay corporate tax in the UAE?
- They are inside the corporate tax regime and must register. A 0% rate applies only to qualifying income of a Qualifying Free Zone Person that meets substance and compliance conditions; other income is taxed at 9% above AED 375,000.
- When must I register for VAT?
- Within 30 days of exceeding AED 375,000 in taxable supplies over any rolling 12-month period. You may register voluntarily from AED 187,500.
About the author
Sherwin Jesuraj
Business Setup Industry Expert
Sherwin Jesuraj writes about UAE company formation, mainland and free zone options, business setup costs, and entrepreneurship. His content for BusinessSetup.ae helps readers understand their options, compare practical requirements, and make informed decisions before starting a business.
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