UAE FTA Updates Input VAT Apportionment Guide: New SRP Mechanism and Compliance Requirements

• The UAE Federal Tax Authority (FTA) updated its Input Tax Apportionment Guide, effective November 15, 2024, introducing changes based on amendments to the VAT Executive Regulations.
• The main update is the introduction of the Specified Recovery Percentage (SRP), allowing businesses to use a fixed input VAT recovery rate based on the previous year, reducing administrative burden.
• To use the SRP, businesses must prove the standard method is distorted, submit supporting calculations, and obtain FTA approval; once approved, SRP applies for four years with a two-year minimum lock-in.
• A new requirement mandates notification to the FTA if the actual recovery ratio deviates by more than 10% from the approved SRP, triggering possible reassessment.
• The update aims to simplify compliance while ensuring accuracy, and businesses are advised to review their apportionment methods and consider the SRP’s benefits.

Source: mailchi.mp

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---