Amendments aim to simplify procedures, clarify VAT treatment across several areas and further align the UAE tax system with international best practices.
Abu Dhabi: The Ministry of Finance has announced the issuance of Cabinet Decision No. (149) of 2026 amending certain provisions of the Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax (VAT).
The ministry said the amendments form part of ongoing efforts to further develop the UAE’s tax system, enhance tax transparency, improve implementation efficiency and align the VAT framework with international best practices.
According to the ministry, the amendments are intended to simplify procedures and provide greater clarity for taxable persons, supporting voluntary compliance and reducing tax disputes.
The changes include updates to the provisions governing the supply and import of medical products in line with the UAE’s updated legislative framework for the healthcare sector. They also clarify provisions relating to employee accommodation for input tax recovery purposes.
The amendments further clarify the application of the Capital Assets Scheme to ensure consistency with the provisions of the VAT Law.
In addition, the updates refine the methodology for input tax apportionment so that it more accurately reflects the nature of taxable persons’ economic activities, while maintaining the existing methodology applicable to government entities and charities.
The amendments also introduce provisions governing the VAT treatment of a single composite supply in line with the economic substance of the supply.
New provisions have also been introduced to restrict the recovery of input tax in cases involving cash payments exceeding thresholds that will be specified in a future decision by the Minister of Finance. The ministry said these measures are intended to strengthen compliance and reduce the risk of tax evasion.
The Ministry of Finance said the amendments reflect its continued approach to reviewing and enhancing the UAE’s tax legislation in line with economic and legislative developments, while supporting effective VAT implementation and facilitating compliance for businesses.
Source: Emirates 24|7