- UAE VAT clarification VATP046 explains amendments under Federal Decree-Law No. 16 of 2024 and No. 16 of 2025 on e-invoicing, input tax recovery, reverse charge, and excess recoverable tax.
- Residency for VAT is clarified: property ownership is not required; a place of establishment or fixed establishment in the UAE determines residency status. Foreign businesses may create a fixed establishment if employees regularly work from UAE premises.
- E-invoicing rules were introduced: electronic invoices/credit notes are not automatically valid tax invoices/credit notes unless they meet Executive Regulation requirements, and affected businesses must issue and transmit them through the designated e-invoicing system.
- For input tax recovery, VAT invoices required under e-invoicing must be retained electronically, and the Cabinet may set additional conditions; penalties apply for failure to issue required invoices/documents once e-invoicing requirements take effect.
- A new Article 54 bis allows the FTA to deny input tax deduction where a supply or supply chain is linked to tax evasion and the taxable person knew or should have known.
Source: regfollower.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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