UAE Updates VAT Rules with New Exemptions and Simplified Procedures

The UAE Cabinet has approved Decision No. 100 of 2024, amending certain provisions of the Executive Regulations of Federal Decree-Law No. 8 of 2017 on Value Added Tax (VAT), as announced by the Ministry of Finance.

These amendments aim to enhance transparency in the tax regime and ensure compliance with UAE tax legislation.

Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, emphasized the commitment to refining the tax environment in the UAE, highlighting the importance of balancing tax revenue collection with boosting the investment climate.

“We believe these amendments will help minimize misunderstandings or incorrect applications of the law, as well as simplify procedures for taxpayers,”

he stated, underscoring their alignment with international best practices.

Key changes include the exemption of investment fund management services from VAT to promote growth in the investment management sector. Additionally, certain services related to virtual assets will be exempt, supporting innovation and reinforcing the UAE’s position as a hub for virtual asset investment.

The amendments also introduce an exemption for in-kind donations between charitable and government entities, valued at up to AED 5 million over a 12-month period, allowing donors to recover the VAT incurred. Furthermore, the Federal Tax Authority will gain authority to deregister taxpayers under specific conditions, strengthening tax compliance and improving the efficiency of tax administration.

These changes reflect the Ministry’s ongoing efforts to address challenges faced by the business community while promoting economic growth and reinforcing the UAE’s status as an attractive investment destination.

News Source: Emirates News Agency