- From January 14, 2026, the UAE will implement the Reverse Charge Mechanism (RCM) on domestic metal scrap trading between VAT-registered entities, shifting VAT accounting from supplier to recipient.
- The recipient must provide a valid Tax Registration Number and a written declaration of intent to resell or process the scrap for RCM to apply; otherwise, standard 5% VAT rules remain.
- RCM does not apply to zero-rated supplies, such as qualifying exports, which retain their existing VAT treatment.
- The change aims to address cash-flow issues and VAT compliance risks in the scrap metal sector, reallocating VAT responsibility to improve compliance and administrative efficiency.
- This follows previous expansions of RCM to other goods, including precious metals and stones, as per earlier Cabinet Decisions.
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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