Tag: UAE VAT

UAE’s Latest VAT Amendments: Key Changes Explained

UAE: Public clarification issued on VAT amendments

The Emirati Federal Tax Authority (FTA) released Public Clarification No. VATP040, providing details on recent amendments to the Executive Regulation of Federal Decree-Law No. 8/2017. The clarification outlines changes to VAT regulations affecting registration, tax calculations, exemptions, and compliance requirements.

Key updates in the clarification:

  • VAT registration and deregistration: Updates to the rules governing mandatory and voluntary registration, as well as changes related to tax group registration, deregistration, and amendments.
  • Profit margin taxation: Amendments to provisions for accounting for tax on profit margins.
  • Zero-rated supplies: Clarifications on zero-rating rules for exported goods and services, international transportation of passengers and goods, and healthcare services.
  • Input tax adjustments: Revised input tax apportionment and adjustment rules under the capital assets regime.
  • Record-keeping requirements: Updates to compliance and documentation obligations for taxable entities.
  • Supply exceptions and tax deregistration: New provisions specifying supply exemptions and criteria for tax deregistration.

The clarification provides guidance to businesses on implementing the latest VAT amendments in accordance with the updated Executive Regulation.

UAE VAT Refunds Surge: 34,900 Applications Approved with New Digital Initiatives

The Federal Tax Authority (FTA) has approved 34,900 applications from UAE nationals for VAT refunds totaling Dh2.9 billion for newly built residences since the service’s inception over six years ago. This represents a 27.52% increase in applications and a 32% rise in monetary value compared to the previous year.

In 2023, 7,520 applications were processed, reflecting significant growth from prior years. Additionally, there has been a notable expansion in the VAT-refund scheme for tourists, with 17,847 retail outlets participating by the end of 2024, up from 16,357 the previous year. Self-service kiosks for tourist tax refunds increased from 82 to 97 during the same period.

Khalid Ali Al Bustani, FTA Director-General, emphasized the authority’s commitment to digital transformation, highlighting initiatives like the ‘Maskan App’ for UAE nationals to claim refunds and a new VAT refund system for e-commerce purchases by tourists, enhancing efficiency and service quality in the tax sector.