The Ministry of Finance has amended some of the provisions in Value Added Tax (VAT) in the UAE.
The changes will take effect from 1 January, 2023.
Among the changes made to Federal Decree Law No.8 of 2017 on VAT, is the provision that registered persons are allowed to apply for an exception from VAT registration if all of their supplies are zero-rated or if they no longer make any supplies other than zero-rated supplies.
Zero-rated supplies are supplies of property and services that are taxable at the rate of 0 percent. Some examples of zero-rated items include certain foods and beverages, exported goods, donated goods sold by charity shops, equipment for the disabled and prescription medications and is determined by the taxing authority.
Other changes include setting a 14-day period to issue a tax credit note to settle output tax, in line with the time frame set for issuing tax invoices.
The ministry statement said the Federal Tax Authority (FTA) may forcibly deregister persons in specific cases if deemed necessary.
It also includes amendments to certain provisions to clarify and confirm the intended meaning of the text; to rephrase; or to improve the legislative sequence of legal provisions.
No changes were announces to the VAT rate, which remains unchanged at 5 percent.
The amendments have been made in line with international best practice in light of the GCC Unified VAT Agreement. They are based on past experiences, challenges faced by various business sectors as well as the recommendations received from the relevant parties, added the statement.
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