No, exempt supplies within the United Arab Emirates do not contribute to the VAT registration threshold.

Exempt supplies are specific goods or services that are not subject to VAT. These supplies do not attract VAT, and businesses making exempt supplies cannot recover input VAT incurred on their related expenses.

Examples of exempt supplies in the UAE include:

• certain financial services,
• most medical or healthcare services,
• residential properties,
• local passenger transport, and
• bare land.

In the context of the VAT registration threshold, exempt supplies are not considered when calculating whether a business has crossed the threshold. This means that the value of exempt supplies does not count towards the mandatory registration threshold of AED 375,000. Therefore, businesses that only engage in exempt supplies and do not make any taxable supplies may not be required to register for VAT.

For expert tax advice in the UAE, please get in contact.