- UAE Cabinet Decision No. 149 of 2026 amends the VAT Executive Regulation from 1 October 2026, including updates to medical products, profit margin scheme purchase price rules, capital asset definition, and tax credit note rules.
- Anti-fragmentation rule added: supplies with multiple interconnected components that cannot realistically be separated must be treated as a single supply, with the principal component determining VAT treatment.
- Input tax recovery is denied for certain cash-settled supplies above a threshold to be set by Ministerial Decision.
- Employee benefit input tax recovery is broadened but made more evidentially dependent: recovery is allowed where benefits are mandatory under UAE labour/free zone law or where provided under a contractual obligation or documented policy, subject to FTA conditions; employer accommodation remains blocked unless mandated by MOHRE directives.
- Financial services input tax recovery rules now use a 30-day “outside the State” test aligned with the VAT zero-rating export test, replacing the prior one-month wording.
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.
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