The UAE Cabinet has amended some such provisions in the Value Added Tax (VAT) law, the Ministry of Finance said on Saturday.
The new amendments include exemptions on three services: investment fund management services, some services connected to the virtual assets, and kinds of donations between charitable and government entities.
To boost investment, stimulate growth, and ease the burden on charitable entities, these services, which are now 5 percent on VAT (to be levied at 5 percent) shall be exempt from VAT.
This will also reduce the tax liability of governmental entities and charities in terms of the value of the in kind donations of up to Dh5 million drawn from within 12 months from the tax so that those governmental entities and charities can benefit more from the goods received.
It is also known that the Cabinet also empowered the Federal Tax Authority to de-register taxpayers sometimes to tighten compliance.
These changes are just part of our continuous efforts to refine the tax environment in the UAE to ensure the balance between revenue collection and attracting more businesses and investors to the country, the authority said.
Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, said: “The UAE’s business environment will be enhanced with the coordination of the Ministry with relevant stakeholders from the public and private sectors in an attempt to update our regulations.”
“We think these amendments will reduce the possibility of incorrect application of the law or incorrect applications, and decrease the procedures for taxpayers in line with international best practices and a better life for everyone.”
Designed following international best practices, the amendments were also based on the GCC Unified VAT Agreement, the experience in various countries, the challenges faced by the business community, and stakeholder recommendations to ease implementation.
A set of above changes were introduced in the Cabinet Decision of amending the Executive Regulations of the Federal Decree-Law No. 8 of 2017 regarding Value Added Tax. Some of the amendments correspond to adjustments made to certain provisions of the Regulations, by the provisions stipulated by Federal Decree Law No. 18 of 2022, as it has amended Federal Decree Law No. 8 of 2017. Other amendments are geared to implement the legislative policy of updating some of the Executive Regulations provisions.
