- The UAE FTA issued Directive on Tax Transactions No. 2 of 2026 on VAT output and input tax adjustments for VAT group members.
- From August 1, 2026, a business that leaves a VAT group but remains VAT-registered must report qualifying post-exit adjustments in its own standalone VAT return, even if the original transaction was reported by the group.
- This covers items like rebates, discounts, bad debt relief, and input tax adjustments tied to pre-exit supplies or expenses.
- The former member must keep records linking the adjustment back to the original VAT group reporting.
- VAT group members still remain jointly and severally liable for tax liabilities incurred during the grouping period.
Source: tax.gov.ae
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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