UAE: Updated guide on VAT input tax apportionment
Includes guidance regarding specific recovery percentage
The Federal Tax Authority (FTA) on September 30, 2025, published an updated VAT guide (VATGIT1) on input tax apportionment.
Most notably, the FTA released guidance regarding the specified recovery percentage, which was introduced from November 15, 2024. Subject to obtaining FTA approval, the specified recovery percentage allows a taxpayer to use an input VAT recovery rate calculated from its previous tax year, for determining input VAT recovery on its residual input tax within the VAT returns of the subsequent tax year. Accordingly, the specified recovery percentage removes the requirement to calculate a VAT recovery rate for each individual periodic VAT return during the tax year.
Other additions include updated application timelines and general amendments to the explanations included in the guide.
Read an October 2025 report prepared by the KPMG member firm in the UAE