When determining your VAT taxable turnover for both the voluntary and mandatory VAT registration thresholds, you must take into account the following:
- The value of Standard Rated Taxable Supplies: this includes the total value of supplies you make that are subject to the standard rate of VAT.
- The value of Zero-Rated Supplies: zero-rated supplies are goods or services that are still subject to VAT but at a 0% rate. The value of these supplies should be included in your taxable turnover calculation.
- The value of Reverse Charge Items: reverse charge applies to certain goods or services where the responsibility for reporting the VAT shifts from the supplier to the recipient. The value of these supplies should be included in your taxable turnover.
- The value of Imports for which Import VAT is levied: If you import goods into a country where VAT is levied on imports, the value of those imports should be considered in your taxable turnover calculation.
It is important to note that exports are considered to be Zero Rated and should be included in your VAT registration threshold calculation.
Exempt supplies, which are supplies that are not subject to VAT, should not be included in your taxable turnover.
Please be aware that even a sole trader (i.e. a business within a limited company) providing taxable supplies must register for VAT if they reach the threshold.
If you require expert tax advice in the UAE, please feel free to get in contact.