UAE VAT Executive Regulation Amendments 2024

Deep‑Dive Guide & Practical FAQ

1 | Why this matters

On 15 November 2024 Cabinet Decision 100/2024 rewrote large parts of the 2017 VAT Executive Regulation. The Federal Tax Authority (FTA) published a 37‑page Public Clarification explaining 36 amended articles and 2 brand‑new ones. Below you’ll find a practitioner‑friendly breakdown with extra context, examples, and an expanded FAQ.

2 | VAT changes at a Glance

Theme	What changed	Who’s impacted
Fresh definitions	Business day, standard rate (5 %), virtual assets	All sectors
Composite supplies	Must be one supplier and one global price—no line‑by‑line splits	Retail, service bundles
Government‑to‑government transfers	Grants/leases of real‑estate assets are outside scope (retro to 1 Jan 2023)	Ministries, SOEs
Registration cycle	Easier voluntary sign‑up proof; FTA may deregister dormant TRNs (Art 14 bis)	SMEs, holding SPVs
Deemed‑supply thresholds	AED 500 per recipient (gifts) & AED 2 000 / AED 250 000 caps	FMCG, pharma, charities
Export evidence	Three flexible combos of customs + shipping/clearance docs	Traders, free‑zone makers
Domestic leg in int’l transport	Zero‑rate only if the same carrier handles full journey	3PLs, freight forwarders
Financial‑services list	Fund‑management & virtual‑asset transfers now exempt; wallet fees still taxable	Banks, VASPs, fund managers
Input‑tax tweaks	Health‑insurance VAT recoverable; “specified recovery %” option (4‑year lock)	All employers, mixed‑supply firms
Tax‑invoice mechanics	New 14‑day rule for monthly summaries; simplified invoices banned for RCM	Reverse‑charge buyers, e‑platforms

---

3 | Deep Dive by Topic

3.1 Definitions & Scope

• Virtual asset = any digital representation of value that can be traded or used for investment, excluding tokenised fiat and securities. Crypto trades now slot neatly into VAT exemptions.

• Business day aligns VAT deadlines with the 2022 Tax‑Procedures Law calendar.

  
  

3.2 Registration Life‑Cycle

• Voluntary TRN: show contracts or purchase orders proving intent to make taxable supplies. Mere cost‑incurrence > AED 187 500 is not enough.

• Art 14 bis deregistration: FTA can cancel a TRN with no application if (a) thresholds no longer met, (b) draft deregistration left hanging, or (c) other integrity risks. Company must keep monitoring turnover and re‑register when thresholds re‑trigger.

  
  

3.3 Zero‑Rating Overhaul

• Exports of goods (Art 30)

  • Choose any of three documentary pairs. A land‑waybill + agent “shipping certificate” now counts where exit stamps are slow.

  • Evidence must still show who, what, when, where (Article 30 § 5). FTA may reject illegible scans.

• Exports of services (Art 31)

  • Extra blocker: services performed on UAE‑located movable goods (e.g., phone repair) no longer 0 %.

  • “Non‑resident outside the UAE” = ≤ 30 days total presence in UAE in any rolling 12‑month window and not effectively connected to the supply.

• Transport (Art 33–35)

  • Domestic leg zero‑rates only if it forms part of one contract with the int’l carrier.

  • “Qualifying means of transport” tightened—dredgers, drill‑ships, fishing boats excluded.

    
    

3.4 Input Tax & Apportionment

• Staff health insurance: Deductible for one spouse + three children < 18, even when not legally mandated (from 15 Nov 2024 forward).

• Specified recovery %

  • Lock previous year’s recoverable‑ratio for the next four years (min. two‑year commitment).

  • Ideal for banks, mixed real‑estate developers, higher‑ed institutions.

• Capital‑assets scheme: Internally developed asset’s first VAT‑adjustment year begins when actually used, not when merely ready.

  
  

3.5 Invoicing & Credit Notes

• Only TRN‑holders may issue invoices (full or simplified).

• Reverse‑charge buys: Simplified invoices disallowed; buyer must issue full self‑invoice unless an FTA exemption exists.

• Sequential credit‑notes: each new note must reference the adjusted net value left after the previous note.

  
  
  
  

---

4 | Timeline Cheat sheet

1 Jan 2018  – Crypto‑asset transfer exemption applies retroactively
1 Jan 2023  – Inter‑government property transfers outside scope (back‑dated)
15 Nov 2024 – Cabinet Decision 100/2024 in force
14 days     – Deadline to deliver monthly summary invoice
90 days     – Tourist‑refund export window
4 years     – Validity of specified‑recovery‑percentage approval

5 | FAQ

#	Question	Quick answer & reference
1	I have a voluntary TRN but haven’t made sales yet—can FTA cancel it?	Yes, if you filed only NIL returns and left a deregistration draft idle, the FTA may deregister under Art 14 bis. Keep evidence of active business plans.
2	We give AED 450 Ramadan hampers to each client. VAT due?	No—below AED 500/recipient/year gift cap, so not a deemed supply. Keep a log.
3	We donated AED 800 sample kits. Is only AED 300 taxable?	No. Once total deemed‑supply output tax across 12 months exceeds AED 2 000, VAT applies only to the excess. Track cumulative tax amount.
4	We instal machinery in Dubai then ship abroad. Can service be 0 %?	Installation is performed on goods located in the UAE → NOT zero‑rated under Art 31(1)(a)(3). Standard‑rate applies.
5	Our freight partner hires a UAE trucker for the port run. Still 0 %?	Only if your company remains contractually liable for both domestic & international legs. If domestic leg is separately contracted, it’s 5 %.
6	Can we recover VAT on gym memberships for staff?	No. The new exception covers health insurance only. Other perks remain blocked input tax unless legally required.
7	Crypto arbitrage desk charged 5 % on BTC trades in 2022—refund?	Likely yes. Virtual‑asset ownership transfer is exempt retro to 1 Jan 2018. Issue credit notes, adjust returns, or file a refund claim.
8	How do we calculate the “specified recovery %”?	Use last year’s final recovery ratio—via standard or special method approved by FTA. Apply it to each return; wash‑up still required year‑end.
9	Tourist buys watch on 1 Feb 2025; exits 5 May—refund valid?	No. Item must leave the UAE within 90 days of supply (3 May).
10	Our capitalised in‑house software went live this year but was finished last year—when do CAS adjustments start?	First CAS year = the year you put the asset in use (this year), not when coding finished.
11	Can I issue a simplified invoice in USD?	Amounts on simplified invoices must be in AED (Art 59 § 2(e)). Foreign currency only allowed on full invoices if AED equivalent also shown.
12	FTA withdrew our invoice‑delivery waiver—what next?	You must comply immediately (Art 59 § 14). Review systems for electronic or hard‑copy delivery; non‑delivery penalties apply.

6 | Next Steps Checklist

1. Map every supply & cost against the new articles—flag changes.

2. Update ERP / invoice templates (currency, timing, RCM logic).

3. Draft an export‑evidence SOP with the new acceptable combos.

4. Crypto & fund managers: calculate historic VAT overpayments.

5. File “specified recovery %” request if your business benefits.

6. Train sales & logistics teams on composite‑supply pricing rules.

Need bespoke impact modelling or template packs? — Just ask and I’ll prepare tailored worksheets or training slides.