Picture for illustrative purposes only. ARCHIVE

Certain provisions of the Value Added Tax (VAT) law have been amended by the UAE cabinet, as announced by the Ministry of Finance on Saturday (October 5). The new amendments include exemptions for three types of services: investment fund management services, certain services related to virtual assets, and in-kind donations between charitable and government organisations. These services, which were previously taxed at 5 percent, will now be exempt from VAT to encourage investment, promote growth, and lighten the load on charitable organizations. In-kind donations valued at up to Dh5 million between government entities and charities over 12 months will be exempted from tax, helping them make better use of the goods they receive. The Cabinet also gave the Federal Tax Authority the authority to de-register taxpayers in some cases to improve tax compliance. The authority stated that these changes are part of ongoing efforts to improve the tax environment in the UAE. The goal is to find a balance between collecting tax revenues, enhancing the investment climate, and attracting more businesses and investors to the country. Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, said: “We believe these amendments will help minimise misunderstandings or incorrect applications of the law, as well as simplify procedures for taxpayers in line with international best practices, ultimately contributing to an improved quality of life for all.” The amendments were developed following international best practices, considering the GCC Unified VAT Agreement, previous experiences, challenges faced by the business community, and suggestions from stakeholders. FLE/Expat Media
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