Understanding the Profit Margin Scheme under UAE VAT: Eligibility, Benefits, and Compliance Guide

• The Profit Margin Scheme (PMS) allows eligible UAE resellers to pay VAT only on the profit margin, not the full selling price, for certain goods.
• It applies to second-hand goods, antiques, and collectors’ items, and is used at the reseller’s discretion without prior FTA approval.
• Imported goods are only eligible if input VAT was not recovered; VAT is calculated on the profit margin, and no VAT is due if there is no profit.
• Businesses must follow specific VAT return reporting and tax invoice requirements, including special invoice wording and detailed record-keeping.
• The main benefit is a reduced VAT burden, and businesses must notify the FTA when using the scheme.

Source: claemirates.com

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.

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