UAE Announces Key Amendments to VAT Regulations

by Anna Fischer

Published 10 Oct 2024

The UAE has announced new VAT laws as it looks to boost investment and attract more businesses to the country. ^[?]

Source: Freepik

These changes include making things like fund management, specific digital assets, and charitable donations exempt from VAT.

This means these activities won't have to pay this particular tax. The Ministry of Finance announced after the UAE Cabinet gave the green light to Decision No. 100 of 2024. This decision specifically adjusts some rules around how the original VAT law (Federal Decree-Law No. 8 of 2017) is applied. ^[?]

UAE Unveils New VAT Regulations

The Ministry stated that the recent updates show its dedication to making the tax system more open and ensuring everyone follows the UAE's tax laws.

They also mentioned that these updates are part of their ongoing work to improve the tax situation in the UAE. The goal is to find a good balance between getting tax money, making the UAE a better place to invest, and bringing in more companies and investors.

The Ministry is committed to coordinating with relevant stakeholders from both the public and private sectors and working to update our regulations to enhance the UAE's business environment.

Younis Haji Al Khoori

The Undersecretary of the Ministry of Finance

A major decision by the Cabinet to update the rules of the Federal Decree-Law No. 8 of 2017 on VAT marks considerable changes.

Key changes include:

Investment fund management. Now exempt from VAT to encourage growth in this sector, making the UAE an attractive place for investments.

Virtual assets services. Selected services related to digital assets are also VAT-exempt to support innovation and position the UAE as a key location for digital asset investment.

Charitable donations exemption. In-kind donations up to 5 million AED over a year between charity and government bodies are now exempt, allowing donors to recover VAT and supporting their societal impact.

Enhanced tax compliance. FTA can now deregister taxpayers in certain situations, ensuring tax system integrity and improving administration efficiency.

The UAE implements changes to streamline its tax policies and create a favorable environment for businesses and investors. The Ministry of Finance is introducing new tax strategies and plans to align with global best practices in response to the rapidly changing economy. These measures aim to address new challenges and provide enhanced support for businesses, ultimately contributing to economic growth.

We believe these amendments will help minimise misunderstandings or incorrect applications of the law, as well as simplify procedures for taxpayers in line with international best practices, ultimately contributing to an improved quality of life for all.

Younis Haji Al Khoori

The Undersecretary of the Ministry of Finance

taxes VAT

Anna Fischer

Construction Content Writer

Anna has background in IT companies and has written numerous articles on technology topics. Now, building up her expertise in construction and legal regulations, Anna expands the horizons of our blog and delights her readers with insightful articles.

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