UAE Ministry of Finance amends VAT Executive Regulations

The UAE Ministry of Finance has issued Cabinet Decision No. 149 of 2026, amending the Executive Regulation of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (VAT). The updates aim to enhance tax transparency, improve implementation efficiency, and align the national tax system with international best practices.

Key changes include new restrictions on recovering input tax for cash payments that exceed specific thresholds, which will be determined by a subsequent decision from the Minister of Finance. The amendments also clarify the treatment of employee accommodation regarding input tax recovery and refine the input tax apportionment methodology to better reflect the economic activities of taxable persons. While the methodology for government agencies and charities remains unchanged, the new rules aim to reduce tax disputes and evasion.

Additionally, the regulations governing the import and supply of medical products have been updated to align with the UAE’s revised healthcare legislative framework. The decision also clarifies the scope of the Capital Assets Scheme and introduces provisions for the VAT treatment of single composite supplies based on their economic substance.