Does my restaurant need to register for VAT?

The two thresholds

• Mandatory registration: taxable supplies and imports above AED 375,000 in the previous 12 months, or expected to exceed it in the next 30 days
• Voluntary registration: from AED 187,500 of taxable supplies or expenses

What counts towards the threshold

The test uses the value of your taxable supplies, which for a restaurant is essentially everything you sell: dine-in, takeaway, catering and delivery-app orders, measured at the full price the customer pays, not the net amount the platform transfers to you.

The test is a rolling 12 months, checked at the end of every month. A cafe selling around AED 31,000 a month crosses AED 375,000 within its first year.

When to apply

The application is due within 30 days of the date you crossed, or expect to cross, the mandatory threshold. Late registration carries an AED 10,000 penalty, and the VAT you should have charged from the effective date is still owed, often from your own pocket because the customers have already paid.

Is voluntary registration worth it?

A new restaurant spends heavily on fit-out, equipment and opening stock before its sales reach the mandatory threshold. Registering voluntarily lets you recover the VAT on those costs, subject to the normal rules. The trade-off is filing returns from day one. For most new outlets with a large fit-out, it is worth calculating before you open.

Checklist

• Total your sales for each of the last 12 months, gross of delivery-app commission
• Watch the rolling total at every month-end
• Keep the trade licence, tenancy contract and bank details ready for the application
• Make sure your POS can print a valid tax invoice from the effective date