On 2 October 2024 the Federal Tax Authority (“FTA”) published the amended version of the Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax (“Executive Regulation”).
The amendments are implemented following Cabinet Decision No. (100) of 2024 and are effective from 15 November 2024 and bring new VAT exemptions aimed at stimulating economic growth and improving the UAE’s position as a leading investment hub.
Some key changes include:
- Investment Fund Management Services Exemption: Investment fund management services are now exempt from VAT. This amendment is designed to foster growth in the investment sector and increase the UAE’s attractiveness as a global investment center.
- Virtual Assets Services Exemption: Certain services related to virtual assets have also been exempted from VAT. This exemption is part of the UAE’s efforts to support innovation and advanced financial technology, reinforcing its position as a key player in virtual asset investments. The exact virtual assets covered under this exemption are yet to be specified by the Ministry of Finance.
The documentary requirements for goods exported outside the UAE have also been amended allowing for different alternative documents to be provided to evidence the export subject to 0% VAT rate. The changes in the export of services provision aim to clarify the eligibility of the 0% VAT rate on exported services.
Additionally, the Federal Tax Authority has been granted the authority to deregister taxpayers in specific cases, further strengthening compliance and the integrity of the tax system.
Conclusion
These amendments reflect the UAE’s ongoing efforts to simplify its tax system and align it with international best practices, while continuing to attract investment and innovation. By exempting key services, particularly in the investment and technology sectors, the UAE is reinforcing its position as a business-friendly jurisdiction. These updates also simplify VAT compliance and reduce the potential for misapplication of the law.
For expert guidance on navigating UAE corporate tax regulations or enhancing your tax efficiency under the broader UAE VAT regime, our firm provides tailored support. Contact us today for comprehensive legal advice on the UAE’s tax landscape. We are committed to helping you maintain compliance while maximizing financial benefits.
