Picture for illustrative purposes only. ARCHIVE

The UAE has amended its Value Added Tax (VAT) law to include new exemptions and improve tax compliance, according to the Ministry of Finance. These updates, effective immediately, aim to boost investment, stimulate growth, and ease financial burdens on charitable entities and government institutions.

What are the new VAT exemptions?

The amendments introduce three major VAT exemptions: Investment fund management services: Previously taxed at 5 percent, these services are now exempt to encourage more investment in the UAE. Services related to virtual assets: Certain services involving virtual assets are also exempt, part of a broader strategy to promote digital innovation. In-kind donations between government and charitable entities: Donations valued at up to Dh5 million in a 12-month period will now be tax-free, allowing charitable organizations to retain more value from donations.

How will this impact businesses and charities?

The Ministry of Finance believes these changes will foster a more business-friendly environment. Younis Haji Al Khoori, Undersecretary of the Ministry, said, “The amendments aim to simplify procedures for taxpayers and enhance transparency within the tax regime, contributing to an improved quality of life for all.” Additionally, the Federal Tax Authority (FTA) now has the power to de-register taxpayers under specific circumstances, further tightening compliance and reducing misunderstandings about tax laws.
For all the latest news from the UAE and the world, follow us on Facebook, Twitter and Instagram and subscribe to our YouTube page