Category: business

Since its introduction in 2018, VAT in the UAE has been instrumental in diversifying government revenue and ensuring fiscal sustainability beyond oil income.  Over the years, the Federal Tax Authority (FTA) has continuously fine-tuned the VAT system through several Cabinet Decisions — such as Nos. 46 (2020), 99 (2022), and 100 (2024) — to address practical challenges and evolving business practices. The Cabinet Decision No. 100 of 2025, effective from 29 September 2025, builds upon these prior amendments.  It reflects the UAE’s commitment to creating a transparent, efficient, and globally consistent tax environment, while also ensuring that businesses operate under clear and updated compliance guidelines. Key aspects of the Decision and applicable conditions: Article 59 & 60 – Tax invoices & Tax Credit Note: Elimination of simplified invoices: The concept of simplified invoices has been removed under the e-invoicing framework. Consequently, businesses previously issuing simplified invoices for supplies below AED 10,000 will be required to issue e-invoices. Mandatory e-invoicing for zero-rated supplies: All zero-rated transactions, including exports of goods and services to non-UAE businesses, will be subject to e-invoicing requirements. Revised requirements for credit notes: Under the e-invoicing framework, credit notes will no longer be required to include the original invoice value, the corrected value, and the difference between the two. Instead, it will be sufficient to disclose the credit note amount along with the applicable VAT. Electronically issued invoice storage rules: Earlier provisions governing the storage and authenticity of electronically issued invoices and/or credit notes are no longer applicable under the new e-invoicing framework and are expected to be clarified further in due course. Revised VAT Registration and Deregistration Rules One of the most important updates revolves around VAT registration and deregistration. Mandatory Registration Threshold: Remains at AED 375,000, but the enforcement mechanisms have been strengthened. Businesses that exceed this threshold must register within 30 days, and the FTA now has the authority to auto-register businesses if they fail to do so. Voluntary Registration Threshold: Set at AED 187,500, allowing startups and small businesses to register early if they expect taxable supplies or expenses to exceed this limit. Authority-Initiated Deregistration: A new clause, Article 14 (bis), empowers the FTA to deregister businesses that no longer meet VAT registration requirements or fail to comply with regulations — a move designed to protect the integrity of the tax system. This emphasizes the importance of maintaining accurate records, filing timely returns, and ensuring continued eligibility under VAT law. Businesses can minimize risks by working with professionals offering VAT services in Dubai, ensuring ongoing compliance and avoiding penalties.  Key take aways:  Operational Readiness: Companies must update billing systems and processes to generate full tax invoices compliant with detailed data requirements. E-Invoicing Preparation: The VAT framework amendments integrate closely with the forthcoming mandatory e-Invoicing system (piloted from July 2026). Businesses should prepare to issue structured digital invoices when brought into scope. Compliance Risk: Invoices lacking required information will no longer benefit from administrative exceptions — meaning penalties may apply for non-compliance. VAT compliance teams need to align internal controls with the updated rules and ensure systems can handle electronic invoice formats and data submission as defined by future e-Invoicing regulations. Click here to read the official announcement

On 25 November 2025, the UAE Ministry of Finance (MoF) issued Federal Decree-Law No. 16 of 2025, introducing amendments to select provisions of Federal Decree-Law No. 8 of 2017 (The ‘UAE VAT Law’).