The UAE Government has recently implemented amendments to various provisions of the VAT Law, which came into effect on January 1, 2023. These changes, outlined in Federal Decree Law No. 18 of 2022 and Federal Decree Law No. 8 of 2017 on value-added tax, are aimed at enhancing clarity and compliance in VAT operations.
Key Amendments:
Statute of Limitation (SOL) – Article 79 (Bis):
- A new article on SOL is introduced, setting a timeframe within which tax authorities must complete audits or issue assessments.
- This development emphasizes the importance for unaudited businesses to remain audit-ready and anticipate potential tax audits in the first half of 2023.
Tax Procedures Law – Article 83 amended:
- SOL provisions in the VAT Law now supersede those in the Tax Procedures Law, except where no similar provision exists in the VAT Law.
Pure Hydrocarbons – Article (48) amended:
- The reverse charge mechanism now applies solely to pure hydrocarbons, providing clarity on its application.
Timeline for Raising Tax Invoices and Credit Notes – Articles (67) and (62) amended:
- Timelines for raising tax invoices and credit notes are clarified, emphasizing the necessity for adherence to specified timeframes.
Input VAT Recovery on Import of Goods & Services – Article (55) amended:
- Concrete conditions are imposed for documentary evidence, ensuring proper verification before recovering input VAT on import transactions.
New Place of Supply Provision for Continuous/Periodic Supplies – Article (27) (3) (a) (4) added:
- Clarification is provided on the place of supply for supplies involving periodic payments or multiple invoices, particularly when ownership of goods is transferred in the UAE.
Place of Supply of Transport-Related Services – Article (30) (8) amended:
- Amendments consolidate place of supply rules for both transportation services and transport-related services, enhancing clarity in VAT operations.
In Summary:
Taxable persons are urged to review the amendments to the VAT Decree-Law and ensure compliance by January 1, 2023. These changes impact various aspects of VAT operations, including inventory management, invoicing timelines, and bookkeeping procedures.
How Excellence Can Help:
At Excellence, we possess the expertise to understand the technical and legal aspects of these amendments, providing reliable VAT services tailored to your requirements. We stay updated with the latest laws and provisions set by the UAE Government, ensuring compliance with regulatory requirements.
- Verification of Financial Statements
- Ensuring Compliance with Regulations
- Identifying Financial Irregularities
- Assessment of Internal Controls
- Objective Assurance Measures
- Improvement of Reporting Criteria
