As a general rule, VAT registration in the UAE is mandatory if your annual turnover exceeds AED 375,000. This threshold applies to the total value of taxable supplies made within a 12-month period.

When your company sells goods or services to foreign clients (outside the GCC), these invoices are issued without VAT, and the tax is effectively not paid. However, these amounts must still be reported in your VAT return as zero-rated supplies, and the declaration must be filed regardless.

We recommend registering for VAT immediately after reaching the AED 375,000 threshold to avoid risks and claims from the tax authorities. Failure to register when required can result in significant penalties.

Some free zones offer benefits that allow you not to include foreign payments when calculating the registration threshold. However, such benefits require special justification and proper documentation.

If you want to know whether you can avoid VAT registration due to a specific exemption, we advise consulting with our expert. The consultation fee is AED 99.

During the consultation, you can also discuss invoices that you plan to issue without VAT to ensure they are properly formatted and comply with UAE tax regulations.