With the introduction of VAT in UAE, Businesses are forced to keep a closer look at the turnover they reached at particular time to calculate the threshold they reached to apply for vat registration either mandatory or voluntary to avoid penalty of AED 20,000.
Let us understand how the threshold is calculated for Registration, As per Article 19 of Federal law No.8 of 2017, threshold includes the following:-
- The value of Taxable Goods and Services.
- The value of Concerned Goods and Concerned Services received by the Person.
- The value of the whole or relevant part of Taxable Supplies that belong to said Person if he has, wholly or partly, acquired a Business from another Person who made the supplies.
- The value of Taxable Supplies made by Related Parties pursuant to the cases stated in the Executive Regulation of this Decree-Law
For Example, A Person made Sale of 375,000 in UAE, Export of AED 200,000, Exempt supplies of AED 50,000, Imports of AED 25,000 & Reverse charge Mechanism of AED 10,000.
As per the above mentioned article, Turnover would be AED 610,000 (375,000+200,000+NA+25,000+10,000) Exempt supplies should not be considered for Calculation