Overview of recent VAT revisions in the UAE
The UAE Ministry of Finance (MoF) has issued Federal Decree-Law No. 16 of 2024 which amends key provisions of the Federal Decree Law No. 8 of 2017 on Value Added Tax (VAT). These amendments represent a road map for the implementation of electronic invoicing (e-invoicing) in the UAE and reaffirm the country’s commitment to introducing phase 1 of the e-invoicing reporting within the stipulated timeline of Q2 2026.
These updates follow a major development by the Ministry of Finance (MoF), which recently published a designated page on the e-invoicing system on its website.
The amended provisions will come into effect 30 days from the date of issuance in the Gazette on 30 September 2024.
Businesses are encouraged to review these amendments and perform an e-invoicing readiness assessment, along with a comprehensive review of the governance structure, to ensure successful implementation across all business functions and facilitate a smooth transition.
| Article (1) – Definitions | New definitions have been added to the VAT Law, clarifying the following: Additionally, the definitions of ‘tax invoice’ and ‘tax credit note’ have been amended to reflect these updates. |
| Article (55) – Recovery of recoverable input tax in the tax period | A new condition has been added for the purpose of input VAT recovery in addition to the ‘documentation’ and ‘intention to pay’ conditions, where the taxable person should retain the tax invoice according to the e-invoicing system when it is required to be issued or is issued in electronic format. |
| Articles (65) and (70) – Conditions and requirements for issuing tax invoices and tax credit notes | New clauses have been added confirming that the taxable person who is subject to the e-invoicing system should issue the tax invoice/tax credit note and deliver them in electronic format according to that system. |
| Other amendments | ─ The definition of ‘Non-Resident Person’ has been amended. ─ Article (76) on ‘Administrative Penalties Assessment’ has been revised to confirm that failure to issue tax invoices/tax credit notes, or an alternative document, will be subject to administrative penalties if they are not issued within the legally prescribed period. |
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