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UAE: Profit margin scheme VAT guide

Key considerations for record-keeping, invoicing, and VAT return reporting obligations and requirements

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february 17, 2026

The Federal Tax Authority on January 5, 2026, published a value added tax (VAT) guide, clarifying the application of the profit margin scheme under the UAE VAT framework.

The guide explains the conditions, scope, and compliance requirements for applying VAT on the profit margin for eligible goods, including calculating the profit margin and accounting for VAT in special cases, such as the selling of eligible goods at loss or at breakeven. The guide also covers key considerations for record-keeping, invoicing, and VAT return reporting obligations and requirements, without amending the VAT law or its executive regulation.


For more information, contact a KPMG tax professional in the UAE:

Keith Donegan | keithdonegan@kpmg.com

Luis Alonso | lalonso1@kpmg.com

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