Recent Amendments to UAE VAT Executive Regulation 2024

Article 3 (bis) – Exceptions of supplies 

a. The grant or transfer of ownership or disposal of government buildings, real estate assets and other projects of a similar nature from a Government Entity to another Government Entity. 

b. The grant or transfer of the right to use, exploit or utilize the government buildings, real estate assets and other projects of a similar nature from a Government Entity to another Government Entity, including any granted or transferred right of use, exploitation or utilization as of 1 January 2023. 

Transfers of real estate and related assets between government entities are excluded from VAT (Out of scope supplies) retrospectively from January 1, 2023. 

Article 5 – Exceptions related to deemed supply 

Article 8 – Voluntary registration 

For the purposes of Clause 5 of Article 12 of the Decree-Law, the total of Output Tax payable on all Deemed Supplies shall not exceed the following: 

a. An amount of AED 2,000 (two thousand dirhams) for each supplier, within a 12-month period, and any amount exceeding this threshold shall be considered Payable Tax. 

b. An amount of AED 250,000 (two hundred fifty thousand dirhams) for each supplier that is a Government Entity or a Charity in case the recipient is a Government Entity or a Charity, within a 12-month period, and any amount exceeding this threshold shall be considered Payable Tax. 

A Person may not register for Tax voluntarily unless he proves to the Authority that: 

a. he is carrying on a Business in the State, and 

b. he has the intention to make any of the supplies specified in paragraphs (a), (b) or (c) of Clause 1 of Article 54 of the Decree-Law. 

If the value of the supply of the Goods (Goods were supplied as samples or commercial gifts) 

for each Recipient of Goods within a 12-month period, does not exceed the amount AED 2,000, then it is excluded from VAT 

Deemed supplies between government/charitable entities under AED 250,000 over 12 months are excluded from VAT. 

Voluntary registration requires proof of conducting business and intent to make specific supplies under Article 54(1) 

Article 29- Accounting for tax under Proft Margin 

The profit margin is the difference between the purchase price of the Goods and the selling price of the Goods, and the profit margin shall be considered to be inclusive of Tax. 

The “purchase price” stated in Clause 4 of this Article includes, in addition to the price of the Good, any costs and fees incurred to purchase the Good. 

The purchase price for Profit Margin Scheme now includes acquisition costs and fees. 

Article 30 – Zero-rating the export of goods 

The Direct Export shall be subject to the zero rate if the following two conditions are met: 

a. The Goods are physically exported to a place outside the Implementing States or are put into a customs suspension regime in accordance with the GCC Common Customs Law within 90 (ninety) days of the date of the supply. 

b. The exporter retains any of the following: 

1) a customs declaration, and Commercial Evidence that proves the Export, 

2) a Shipping Certificate and Official Evidence that proves the Export, or 

3) a customs declaration that proves the suspension arrangement of customs duties, in case the Goods are put into customs suspension. 

“Official Evidence” means the export certificate issued by the customs departments in the State or a clearance certificate issued by these departments or the competent authorities in the State 

“Commercial Evidence” means the document issued by sea, air or land transport companies and agents, which proves the transfer and departure of the Goods from the State to outside the State, and includes any of the following documents: 

1) Air waybill or air manifest. 

2) Sea waybill or sea manifest. 

3) Land waybill, or land manifest. 

“Shipping Certificate” means a certificate issued by sea, air or land transport companies and agents as an equivalent of a commercial evidence where it is not available. 

Businesses can now use multiple forms of evidence (customs declaration, shipping certificate, etc.) to substantiate a zero-rated export. 

This provides flexibility in proving exports, making it easier to claim zero-rated VAT. It reduces the risk of proving export claims due to non-availability of some relevant documents 

Article 31 – 

Zero-rating the Export of Services 

Clause 1(a) 

The Services are not treated as being performed in the State or in a Designated Zone under Clauses 3 to 8 of Article 30 and Article 31 of the Decree-Law. 

Zero-rating does not apply to services where the special place of supply rules apply, including telecommunications and electronic services. 

Article (42) – Tax Treatment of Financial Services 

Clause 3 

The following financial services shall be exempted: 

d. Fund management services described in paragraph (j) of Clause 2 of Article 42 

e. Services specified in paragraphs (k) and (l) of Clause 2 of Article 42, including services supplied on or after 1 January 2018. 

Investment fund management services, transfer of ownership and conversion of digital assets (e.g., currencies, investments) are exempt from VAT. 

The VAT exemptions for digital asset transfers and conversions have been applied retrospectively from January 1, 2018. 

Article 46 – Tax on Supplies of More Than One Component 

Article 53 – Non-recoverable Input Tax 

Clause 1 (b) 

If a single composite supply does not contain a principal component, the Tax treatment shall, generally, be applied based on the nature of the supply as a whole. 

Input Tax shall be recoverable if it is incurred by a person where the Taxable Person provides health insurance, including enhanced health insurance, to its employees and their family members (as applicable) up to a husband or one wife, and three children younger than eighteen years. 

Tax treatment of composite supplies follows the main component or overall nature of the supply 

Input tax on health insurance for one spouse and up to three children under 18 is now recoverable. 

Article 59 – Tax Invoices 

Clause 13 

Registrant shall issue the Tax Invoice within 14 (fourteen) days from the date of the supply provided for in Article 25 or 26 of the Decree-Law, except in the following cases: 

1) where the Tax Invoice is issued in accordance with Clause 2 of Article 59, the Registrant shall issue the Tax Invoice on the date of supply, 

2) for the purposes of Clause 6 of Article 59, the Registrant shall issue a summary of the Tax Invoice and deliver it to the Recipient of Goods or Recipient of Services within 14 (fourteen) days of the end of the calendar month within which the date of supply occurs for such supplies. 

Simplified tax invoices must be issued on the date of supply and are not permitted where VAT is accounted for under the reverse charge mechanism. 

A summary tax invoice can be issued and delivered to the recipient within 14 days after the end of the calendar month in which the supplies took place. 

Article 60 – Tax Credit Note 

Where an agent who is a Registrant makes a supply of Goods and Services for and on behalf of the principal of that agent, that agent may issue a Tax Credit Note in relation to that supply as if that agent had made the supply, provided that the principal shall not issue a Tax Credit Note, subject to: 

a. the agent retaining sufficient records in such a manner as to determine the name, address and Tax Registration Number of the principal supplier, and 

b. the principal supplier retaining sufficient records in such a manner as to determine the name, address and Tax Registration Number of the agent. 

Tax credit notes require adjustments for multiple notes and detailed record-keeping by agents and principals.