UAE VAT Executive Regulations

UAE VAT Executive Regulations Introduction

Summary of Amendments, Effective 15th November 2024

The Federal Tax Authority (FTA) in the United Arab Emirates has announced Cabinet Decision No. (100) of 2024, which modifies the Executive Regulations of Federal Decree-Law No. (8) of 2017 on Value Added Tax, with effect from 15th November 2024.

The purpose of these amendments is to improve understanding and provide more information on important provisions and processes, while also considering previous amendments in the Decree-Law and other pertinent tax laws.

It is advisable for taxpayers to thoroughly examine the revisions to grasp how these revisions may affect their business activities and VAT responsibilities.

Follow this link to read our comprehensive A to Z Guide for VAT in the UAE.

UAE VAT Main Revisions

Below are the key amendments that are expected to have the most substantial or widespread impact.

Zero-rating the Export of Goods – Article 30

Following the amendments, the export of goods now has less stringent documentary requirements for applying a zero rate of VAT.

Exporters must make sure they retain one of the following documents so as to have proof of the export:

Customs declaration – commercial evidence;
Shipping certificate – official evidence;
Customs declaration evidencing the customs duties suspension in the event that the goods are under customs suspension.

Furthermore, the amended article defines and clearly explains the terms “official evidence”, “commercial evidence” and shipping certificate”. The text provides specific examples like air waybills, sea waybills and land manifests. It also outlines the essential details required in the documents, including supplier, consignor, value, goods, export destination and mode of transport.

Zero-rating the Export of Services – Article 31

Article 31 now includes an additional condition for zero-rating the export of services, specifying that the services must not be considered as performed within the state or within a designated zone.

This adjustment impacts services like real estate, E-services and telecom services, potentially limiting their eligibility for zero-rating if they have a place of supply in the UAE.

Taxation of Financial Services – Article 42

Certain services are eligible for exemption to VAT:

Investment fund management;
Transferring ownership of virtual assets and cryptocurrencies;
Converting virtual assets;

Investment Fund Management

Included in the clause is a definition of the scope of services that is provided by the fund manager, including but not limited to overseeing the fund’s operations, managing investments on behalf of the fund, and monitoring and enhancing the fund’s performance.

Virtual Assets

Activities related to virtual assets, for instance, the transfer of ownership of digital currencies, the conversion of virtual assets, and managing or enabling control over virtual assets.

Tax on Supplies of more than one Component – Article 46

The 2024 update to Article 46 introduces a new sub-clause that states when a composite supply lacks a principal component, the tax treatment should reflect the overall nature of the supply. This clarification addresses situations where there is no clear principal component, whereas the 2022 version does not address this, as it states only that tax treatment follows the principal component of the supply, leading to uncertainties in specific cases.