VAT stands for Value Added Tax. In the UAE, VAT is a consumption tax levied on the supply of goods and services. It was introduced on January 1, 2018, at a standard rate of 5%. VAT is applied to most goods and services.

If a business meets the registration threshold for VAT in the UAE but fails to register, it would be considered non-compliant with the tax regulations. Non-registration or failure to register for VAT when required can result in penalties and fines imposed by the Federal Tax Authority (FTA).

In the UAE, businesses meeting certain criteria are required to register for VAT. The registration threshold is set at AED 375,000 of taxable turnover over the previous 12 months, or if the business anticipates that its turnover will exceed this threshold within the next 30 days.

In the UAE, the minimum threshold for voluntary registration for VAT is set at AED 187,500 of taxable turnover over the previous 12 months, or if the business anticipates that its turnover will exceed this threshold within the next 30 days. Voluntary registration allows businesses to take advantage of VAT input tax recovery and be recognized as a registered VAT entity.