Amendment Of VAT Decree-Law: UAE

UAE Ministry of Finance has embraced several amendments to Federal Decree-Law No.8 of 2017 on Value Added Tax (VAT). The new amendments are included in Federal Decree-Law No. 18 of 2022. These are proposed due to the loopholes and challenges faced by several businesses.

The following amendments would be effective from January 1st, 2023

• Registered people who make taxable supplies are eligible to request an exemption from VAT registration if all of their supplies are zero-rated or if they stop making any other supplies besides zero-rated supplies.
   
• One of the circumstances used to determine the date of supply is the day one year has passed since the date the goods or services were given.
   
• The location of the supply of transport-related services shall be the place where the transportation starts.
   
• Imports of transportation equipment, products connected to transportation equipment, and rescue aircraft and ships will not be subjected to Zero VAT.
   
• The domestic reverse charge will apply to Pure Hydrocarbons.
   
• Charitable organizations are eligible to recoup input VAT they paid to provide the necessary charitable operations.
   
• Record-keeping requirement for VAT recoverability.
   
• If the taxable individual uses a false tax treatment. The taxable person should now issue a tax credit note to modify the output tax in such circumstances.
   
• When a taxable person sends a tax invoice with the label "VAT" on it or gets money marked up as "VAT," it is required that they pay the VAT to the Federal Tax Authority (FTA).
   
• In line with the deadline established for releasing tax invoices, a 14-day window has been set aside for the issuance of tax credit notes to settle output tax.
   
• If it is judged necessary, the Federal Tax Authority (FTA) may forcefully deregister registered individuals under certain circumstances.
   
• If the FTA has sent a notice to audit the taxable person, the 5-year statute of limitations will not apply as long as the audit is finished within 4 years of the notice's date of issuance. The statute of limitations is extended by one year if a voluntary disclosure is made by a taxable person within five years of the conclusion of the applicable tax period.