UAE FTA Issues VAT Guide on Profit Margin Scheme: Conditions, Compliance, and Reporting Explained

• The Federal Tax Authority published a VAT guide on January 5, 2026, clarifying the profit margin scheme under UAE VAT.
• The guide details conditions, scope, and compliance for applying VAT on the profit margin for eligible goods.
• It explains how to calculate the profit margin and account for VAT in special cases like selling at a loss or breakeven.
• The guide outlines requirements for record-keeping, invoicing, and VAT return reporting.
• No changes were made to the VAT law or its executive regulation.

Source: kpmg.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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