The UAE introduced amendments to its VAT Executive Regulation through Cabinet Decision No. 100 of 2024, updating several provisions of Cabinet Decision No. 52 of 2017. The amendments, which came into effect on 15 November 2024, introduce changes affecting VAT registration, exemptions, export transactions, financial services, input tax recovery and tax compliance.

The Federal Tax Authority (FTA) subsequently issued Public Clarification VATP040 in March 2025 to provide further guidance on the revised provisions.re and ensuring compliance with the applicable legislation.

For businesses operating in the UAE, understanding these regulatory developments is essential to maintaining accurate VAT reporting, managing tax exposure and ensuring compliance with the applicable legislation.

1. VAT Exemption for Virtual Asset Transactions

One of the notable developments concerns the VAT treatment of virtual assets. The amended regulations introduce a definition of virtual assets and provide exemptions for certain services involving their transfer and conversion.

The exemption applies retrospectively from 1 January 2018, subject to the relevant legislative conditions. However, digital representations of fiat currencies and financial securities are excluded from the definition of virtual assets.

Impact on businesses:

Companies involved in cryptocurrency trading, virtual asset exchanges and related financial activities should review their transaction classifications and historical VAT treatment.

Businesses making both taxable and exempt supplies may also need to reassess their entitlement to input VAT recovery. Importantly, not every service connected with cryptocurrency or blockchain technology automatically qualifies for exemption

2. VAT Exemption for Investment Fund Management Services

The revised regulations introduce a VAT exemption for qualifying fund management services provided to investment funds licensed by a competent authority in the UAE.

Previously, such services were generally subject to VAT. The exemption took effect on 15 November 2024. This amendment is particularly relevant to:

• Investment fund managers and asset management companies.
• DIFC and ADGM investment structures.
• Financial institutions providing qualifying fund management services.

Businesses must evaluate whether their activities fall within the exemption and determine the resulting implications for input VAT recovery. Not all investment advisory or financial consultancy services are necessarily exempt.

3. Revised VAT Rules for Export of Goods

The amendments introduce greater flexibility regarding the documentary evidence required to support the zero-rating of exported goods. Businesses may use qualifying export documentation, including prescribed customs documentation, shipping certificates and other permitted commercial evidence, depending on the applicable conditions.

The FTA’s subsequent clarification also addresses the documentation requirements for exports undertaken before the amendments became effective.

What businesses should do:

Exporters should maintain comprehensive transaction records, including shipping documents, customs declarations, commercial invoices and evidence of the movement of goods outside the UAE. Companies engaged in international trading, import-export activities and free zone operations should review their existing documentation procedures to ensure that zero-rated transactions are adequately supported.

4. Changes to Zero-Rating of Exported Services

The VAT treatment of services supplied to overseas customers has also been clarified.

Under the amended provisions, services cannot qualify for zero-rating under the general export-of-services rules where their place of supply is treated as being within the UAE under specified special place-of-supply provisions. These provisions can affect certain services involving transport, catering, cultural activities, sporting events and educational services.

Businesses providing cross-border consultancy, professional services or other international services should assess each transaction against the relevant place-of-supply rules. The location of the customer alone does not automatically establish eligibility for zero-rated VAT.

5. Updated Voluntary VAT Registration Requirements

The amended regulations clarify the conditions for voluntary VAT registration.

Applicants must demonstrate that they are carrying on a business in the UAE and intend to make taxable supplies, or qualifying supplies outside the UAE that would be taxable if made domestically. The FTA may assess the applicant’s business activities and supporting documentation when determining eligibility.

This is particularly relevant for newly incorporated companies, holding companies, investment entities and businesses preparing to commence commercial operations. Companies considering voluntary VAT registration should ensure that their business model, anticipated transactions and supporting documents establish eligibility.

6. Changes to VAT Deregistration Procedures

The revised Executive Regulation strengthens the FTA’s authority to deregister taxable persons in specified circumstances.

The amendments also address situations involving incomplete deregistration applications. Importantly, VAT deregistration does not eliminate a business’s existing tax obligations or remove its responsibility to register again if the statutory registration conditions are subsequently met.

Businesses undergoing liquidation, restructuring, business closure or changes in taxable activities should carefully assess their VAT deregistration requirements. Failure to manage deregistration correctly may result in outstanding compliance obligations and potential administrative penalties.

7. Amendments to Input VAT Recovery and Apportionment

Businesses making both taxable and exempt supplies must apply the relevant input tax apportionment rules to determine how much VAT they can recover. The amendments introduce changes and clarifications concerning input tax recovery calculations, tax periods and the treatment of certain non-recoverable expenses.

They also address the application of specified recovery percentages and the annual adjustment process. These provisions are particularly important for businesses operating in financial services, real estate, investment management and other sectors involving mixed supplies.

Companies should review their accounting systems and input VAT calculations to ensure that recoverable and non-recoverable expenses are appropriately classified.

8. Clarification of Composite Supplies

The amended regulations clarify the conditions under which multiple goods or services may be treated as a single composite supply.

The relevant conditions include the relationship between the different components, whether they are supplied by a single supplier and whether their prices are separately identified or charged. The FTA’s clarification emphasises that all applicable conditions must be satisfied before a transaction can be treated as a composite supply.

Businesses offering bundled products, service packages or combined commercial arrangements should examine whether their transactions constitute a single supply or multiple separate supplies. Incorrect classification can affect the VAT rate, tax invoice treatment and reporting requirements.

What Should UAE Businesses Do Following These VAT Amendments?

The UAE has updated its VAT Executive Regulation — and if you run a business here, it’s time to review how these changes affect your tax position.

The amendments reinforce one clear message: accurate transaction classification, proper documentation, and proactive compliance matter more than ever. Businesses should review six key areas:

1. VAT classification of goods and services
2. Eligibility for VAT exemptions and zero-rating
3. Input VAT recovery and apportionment calculations
4. Export documentation and record-keeping procedures
5. VAT registration and deregistration obligations
6. Accounting systems and VAT returns

A proactive compliance review helps identify incorrect tax treatment, reduce penalty exposure, and improve financial reporting accuracy.

How Corpin Consultants Can Assist Your Business

At Corpin Consultants, we provide comprehensive UAE tax advisory and accounting solutions to help businesses understand their obligations and maintain regulatory compliance.

Our VAT & Tax Services

• VAT registration and deregistration
• VAT return preparation and filing
• VAT advisory and transaction assessments
• Input VAT recovery reviews
• VAT compliance assessments and documentation
• Accounting and bookkeeping services
• Financial statement preparation and auditing support
• UAE Corporate Tax registration, advisory, and return filing

Whether you operate a Dubai mainland company, a UAE free zone entity, a holding company, or an international trading business, our team can help you assess the VAT implications of your commercial activities.

Stay Compliant with UAE VAT Regulations

The amendments to the UAE VAT Executive Regulation reinforce the importance of accurate transaction classification, proper documentation, and effective tax compliance procedures. Businesses should periodically review their VAT positions to ensure alignment with the applicable legislation and subsequent FTA guidance.

Contact Corpin Consultants for professional VAT advisory, accounting, and tax compliance support in Dubai and across the UAE.