UAE VAT Amendments Effective November 2024: Key Changes Explained

April 1, 2025

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The Federal Tax Authority of the United Arab Emirates (UAE) released a VAT public clarification document addressing the changes in effect from November 15, 2024. The key changes to the Executive Regulations are relevant for all taxable persons.

While some amendments have general applications, others are industry-specific, such as VAT exemption for financial services or treatment of international transportation services.

Key Amendments in the Executive Regulations

As stated in the guidelines, services provided by independent fund managers for funds licensed by UAE authorities are VAT-exempt. Additionally, the transfer of ownership and conversion of virtual assets, including bitcoin, are exempt from VAT.

However, keeping and managing virtual assets by providing related services is taxable if they are supplied in the UAE for a fee, commission, or similar charge.

The clarification document also explains amendments that aim to ease the proof requirements for suppliers applying the zero-rate on exported goods by introducing increased flexibility in the types of documents that taxable persons can use as proof of export. Therefore, taxable persons may now use customs declarations, shipping certificates, and other official documents confirming the export status of goods.

Other amendments include changing the definition of virtual asset to include cryptocurrencies but exclude digital representation of fiat currencies. Furthermore, the term “business day” was introduced to align with the Tax Procedures Law. New calculation methods for shorter tax years or tax group changes allow businesses to apply for a fixed input VAT recovery rate.

One significant novelty is that the Federal Tax Authority can cancel VAT registration when requirements are met or deregister taxable persons who did not complete the deregistration process or no longer qualify for VAT registration.

Conclusion

Since these are only some changes made to the Executive Regulation on VAT, taxable persons doing business in the UAE should dedicate time and effort to better understand the new rules and regulations. By issuing public clarification documents on VAT, the Federal Tax Authority took all the necessary steps to ensure that taxable persons were fully aware of their obligations and responsibilities.

Since the rules are effective from November 2024, where some rules are retroactively applied from 2018, the impact of these amendments should not be neglected.

Source: Federal Tax Authority - VAT Public Clarification, VATabout

What are the key VAT amendments in the UAE effective from November 2024?

The key amendments include VAT exemptions for certain financial services, the VAT treatment of virtual assets, changes in export proof requirements, and updates on tax group changes and deregistration.

How does the new VAT rule affect virtual assets in the UAE?

The transfer and conversion of virtual assets, such as bitcoin, are exempt from VAT. However, services related to managing or keeping virtual assets for a fee are taxable.

What documents can be used as proof of export under the new VAT amendments?

Taxable persons can now use customs declarations, shipping certificates, and other official documents to prove the export status of goods, increasing flexibility in VAT reporting.

What is the new definition of 'virtual assets' under the UAE VAT amendments?

The definition now includes cryptocurrencies but excludes the digital representation of fiat currencies, clarifying the VAT treatment of virtual assets.

How will the new VAT amendments impact VAT registration and deregistration in the UAE?

The Federal Tax Authority can now cancel VAT registration when specific requirements are met or deregister taxable persons who no longer qualify for VAT registration or didn’t complete the process.

What does the introduction of the term "business day" mean for VAT calculations?

The introduction of "business day" aligns the VAT rules with the Tax Procedures Law, providing clarity for businesses on tax calculation methods, especially for shorter tax years or tax group changes.

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