What UAE business need to know about VAT and Excise Tax Registration

The Federal Tax Authority (FTA) of the United Arab Emirates has made VAT and Excise Tax registration available through its official online portal — enabling businesses across the UAE to fulfil their registration obligations digitally and efficiently.

VAT in the UAE has been in effect since 1 January 2018, applied at a rate of 5%. Excise Tax, introduced ahead of VAT, applies to specific categories of goods at rates determined by the nature of the product. Together, these two tax frameworks represent the core of the UAE’s indirect tax system, and compliance with both — where applicable — is a legal requirement for businesses that fall within their respective scopes.

This article explains who needs to register for each tax, what documents are required, and how the regulatory framework governing both is structured.

The Regulatory Framework: Key Cabinet Decisions

The UAE’s VAT and Excise Tax systems are governed by a set of Cabinet Decisions that establish the legal and administrative foundations for both taxes. Businesses should be aware of the four key instruments:

Cabinet Decision No. 37 of 2017 This decision covers the Executive Regulation of Federal Decree-Law No. 7 of 2017 on Excise Tax. It addresses liability for tax payment — specifically, who is responsible for settling the tax when it has not been paid by the primary obligor.

Cabinet Decision No. 38 of 2017 This decision sets out the agreed excise tax rates and the methodology for calculating the excise price of goods. It provides the specific rate and price framework that registered businesses must apply.

Cabinet Decision No. 39 of 2017 This decision establishes the fees for services provided by the FTA to its clients — covering the costs associated with registration and other FTA services.

Cabinet Resolution No. 40 of 2017 This resolution sets out the administrative penalties applicable for violations of UAE tax law — including Federal Law No. 7 of 2017 on Tax Procedures, Federal Decree-Law No. 7 of 2017 on Excise Tax, and Federal Decree-Law No. 8 of 2017 on VAT. Understanding the penalty framework is important for any business seeking to remain compliant.

Must Check: VAT Registration Services

Do You Need to Register for Excise Tax, VAT, or Both?

Excise Tax Registration

Excise Tax applies to specific categories of goods deemed harmful to health or the environment. Every business in the UAE that produces, imports, or stockpiles excise goods — or intends to do so — is required to register for Excise Tax. There is no turnover threshold for Excise Tax registration; if your business handles excise goods in any of these ways, registration is mandatory.

The current categories of excise goods and their applicable tax rates are:

• Tobacco and tobacco products, and energy drinks — taxed at 100%
• Carbonated drinks — taxed at 50%

VAT Registration

VAT registration in the UAE is determined by the annual taxable turnover of the business:

• Mandatory registration: Businesses with an annual income of AED 375,000 or above are required to register for VAT.
• Voluntary registration: Businesses whose annual income or taxable expenses exceed AED 187,500 — but fall below the mandatory threshold — may choose to register voluntarily. This option is also open to businesses whose expenses alone surpass the voluntary registration threshold, even if their income does not.
• Start-up businesses: Companies that have not yet generated a turnover are specifically encouraged to consider voluntary VAT registration where their circumstances allow. This can provide commercial and administrative advantages from the outset.

Documents Required for Excise Tax Registration

Businesses registering for Excise Tax are required to submit the following documents through the FTA’s online portal:

• Trade Licence(s) — if applicable
• Certificate of Incorporation — if applicable
• Customs number(s) issued by the relevant Customs department(s) — if applicable
• Passport and Emirates ID of the manager, owner, and senior management
• Authorised signatory documents
• Articles of Association, Partnership Agreement, Club or Association Registration, or relevant Law or Decree — if applicable
• Bank account details

Also Check: Excise Tax Services in UAE

Documents Required for VAT Registration

The documents required for VAT registration vary depending on the type of entity registering — whether an individual, an incorporated body, a non-corporate body, or a government entity. The following documents are common requirements across all entity types:

• Trade Licence(s) — if applicable
• Certificate of Incorporation — if applicable
• Financial statements
• Bank account details
• Authorised signatory documents
• Passport and Emirates ID of the manager, owner, and senior management

Additional documents specific to the nature of the entity may be requested by the FTA. It is important to be prepared for the possibility that documentation beyond the standard list may be required depending on the specific circumstances of your business.

Technical requirements for document submission:

• Accepted file formats: PDF, JPG, PNG, and JPEG
• Maximum file size: 2 MB per document

Also Check: VAT Consultancy Services

A Practical Checklist Before You Register

Before beginning the registration process — whether for Excise Tax, VAT, or both — it is worth confirming the following:

For Excise Tax:

• [ ] Have you confirmed that your business produces, imports, or stockpiles excise goods?
• [ ] Are all trade licences and incorporation documents current and valid?
• [ ] Do you have your customs number(s) from the relevant Customs department?
• [ ] Are passport and Emirates ID documents available for all relevant management personnel?
• [ ] Do you have your company’s bank account details ready?

For VAT:

• [ ] Have you confirmed whether your annual income meets the mandatory (AED 375,000) or voluntary (AED 187,500) registration threshold?
• [ ] Are financial statements available and up to date?
• [ ] Do you have all required identity documents for the manager, owner, and senior management?
• [ ] Are authorised signatory documents in order?
• [ ] Are all files in an accepted format (PDF, JPG, PNG, or JPEG) and within the 2 MB size limit?

Why Getting Registration Right Matters

Both VAT and Excise Tax registrations carry ongoing compliance obligations once completed. The administrative penalty framework established under Cabinet Resolution No. 40 of 2017 applies to violations across all three key tax laws — meaning that errors or delays in registration, as well as subsequent non-compliance, can result in significant financial penalties.

Ensuring that your registration is completed accurately, with all required documents in order and submitted within any applicable deadlines, is the first and most important step in managing your UAE tax obligations responsibly.

Also Check: Excise Tax Consultation

How Farahat & Co. Can Help

Farahat & Co. is one of the leading VAT consultants in the UAE, with more than 30 years of experience across a wide range of industries. Our team provides comprehensive support for Excise Tax and VAT registration — from assessing your registration obligations and preparing your documentation to guiding you through the FTA portal process and supporting your ongoing compliance.

Whether you are registering for the first time, seeking to understand your obligations, or looking for professional guidance on any aspect of UAE tax compliance, we are here to help.

Disclaimer: This article is intended for general informational purposes only and does not constitute financial, legal, or tax advice. For guidance specific to your business circumstances, we encourage you to contact our legal and professional team for a consultation.