CD 149/2026 — VAT Regulation amendments

Factual summary

Amends the VAT Executive Regulation from 1 October 2026. It adds a rule that a supply whose components cannot be separated is one composite supply taxed by its principal component; restates zero-rating of medical goods; treats a person present in the UAE for less than 30 days, where that presence is not connected with the supply, as outside the State; resets the conditions for recovering input tax on goods and services given to employees; bars input-tax recovery on a supply above a value set by ministerial decision where it is paid in cash; and rewrites input-tax apportionment, the capital asset definition and the tax credit note heading.

What it means in practice Professional insight

Who: VAT registrants, particularly partly exempt businesses, employers providing staff benefits, and anyone paying suppliers in cash. What to do: review bundled supplies, employee-benefit recovery and cash-paid purchases now; plan the new apportionment method for the first tax year commencing after 1 October 2027.

Key provisions

• Art. 1 Replaces texts in ER Arts. 29(5), 41(4), 52(2), 53(1)(c), 55(6)–(7), 57(1), 60(1)(a).
• Art. 2 Adds ER Arts. 4(6) (composite supply), 54(3) (cash-paid supplies) and 55(19) (government entities and charities).
• Art. 3 Effective 1 October 2026; Art. 55(6), (7), (19) from the first tax year commencing after 1 October 2027.