UAE Ministry of Finance Introduces Amendments to VAT Law

The UAE Ministry of Finance has announced amendments to certain provisions of Federal Decree-Law No 8 of 2017 on Value Added Tax (VAT), which will take effect from 1 January 2023, state news agency WAM reports.

Among the main amendments made by Federal Decree-Law No. 18 of 2022 amending certain provisions of Federal Decree-Law No. 8 of 2017 on VAT is the provision that registered persons making taxable supplies can apply for exclusion from VAT registration if all their supplies are zero-rated or if they no longer make any supplies other than zero-rated supplies.

There is also a 14-day deadline for issuing a tax credit to calculate the output tax in accordance with the deadline for issuing tax invoices.

The federal tax authority may also forcibly deregister registered persons in certain cases if it deems it necessary.

There have been no changes to the 5 per cent VAT on most goods and services, which was introduced in the UAE in 2018 as part of its plans to diversify the economy and reduce dependence on oil.

The current amendments are in line with international best practice in light of the GCC Unified VAT Agreement.