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UAE January 2023 VAT updates

Updates to Value Added Tax rules with GCC VAT Agreement

The Ministry of Finance in the United Arab Emirates is making a series of changes the Federal Law on VAT of 2017.  These will bring it into line with the GCC Unified VAT Agreement, the VAT and Customs Union deal signed between the six members of the Gulf Cooperation Council.

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The changes include:

  • Changing the time limit on credit note issuance to 14 days
  • Empowering the Federal Tax Authority to deregister taxpayers where it sees fit
  • Removal of mandatory VAT registration requirement where all supplies are zero-rated. This is of particular reference to exporters.
  • Tax audits no longer need to be completed within five years of the period under investigation. Instead, they are given an additional four years provided notice of the investigation has been issued within five years
  • The exception to the above is evasion, which has a 15 year limit in the case of evasion
  • Deemed supplies such as supply of goods on FOC (free of cost) to related parties could have earlier triggered a VAT liability under the existing laws.

Arab Gulf GCC VAT implementations

2028+ Kuwait decides between VAT or excise taxes
2025? Qatar delays VAT on inflation worries
Jan 2022 Bahrain doubles VAT to 10%
16 Apr 2021 Oman introduces 5% VAT
1 Jul 2020 Saudi Arabia trebles VAT to 15%
1 Jan 2019 Bahrain launches 5% VAT regime
1 Jan 2018 Saudi Arabia and UAE introduce 5% VAT regime
2016 VAT and Customs Union agreement: Bahrain; Kuwait; Oman; Qatar; Saudi Arabia; UAE United Arab Emirates


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