The UAE Ministry of Finance amended the rules for the collection of value added tax


The Ministry of Finance of the United Arab Emirates has amended a number of provisions concerning value added tax (VAT). These changes will be applied from January 1, 2023.

Among the amendments made to the Federal Law No. 8 of 2017 on VAT, there is a provision allowing registered persons to apply for exemption from VAT registration if all their deliveries have a zero rate or if they no longer carry out deliveries, except for zero-rate deliveries.

Examples of zero-rate deliveries include: certain foods and beverages; exported goods; donated goods sold in charity shops; equipment for the disabled; prescription medications.

Other changes include the establishment of a 14-day period for the issuance of a tax credit note for the calculation of income tax in accordance with the deadlines set for the issuance of tax invoices. In addition, it was found that the UAE Federal Tax Service can forcibly cancel the registration of registered persons in certain cases, if it deems it necessary.

The amendments were made in accordance with the GCC Single VAT Agreement and in accordance with international best practice. They are based on past experience, challenges faced by various business sectors, and recommendations received from stakeholders, the statement said. At the same time, the VAT rate remains unchanged — 5%.

Source: The National