UAE amends VAT law, announces new tax exemptions

The Ministry of Finance on Saturday announced that certain provisions of the Value Added Tax (VAT) law have been amended by the UAE Cabinet.

The new amendments include exemptions on three services, which are: investment fund management services, some services related to virtual assets and in-kind donations between charitable and government entities.

These services, that had earlier been taxed at 5 per cent, will now be exempt from VAT to boost investment, stimulate growth and ease the burden on charitable entities.

In-kind donations between governmental entities and charities valued at up to Dh5 million within a period of 12 months will be exempt from taxes, allowing them to benefit more from the goods they receive.

Aside from this, the Cabinet also granted the Federal Tax Authority the power to de-register taxpayers in some cases – to tighten tax compliance.

The authority said these changes are part of continuous efforts to refine the tax environment in the UAE, aiming to strike a balance between collecting tax revenues, boosting the investment climate, and attracting more businesses and investors to the country.

Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, said: “The Ministry is committed to coordinating with relevant stakeholders from both the public and private sectors and working to update our regulations to enhance the UAE's business environment.”

“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.”

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