The UAE tax landscape has evolved significantly since the introduction of VAT in 2018. Between 2018 and 2024, several key Cabinet Decisions have reshaped VAT compliance, reverse charge mechanisms, refund schemes, and sector-specific tax treatments.

For UAE businesses, understanding these Cabinet Decisions is not optional; it is essential for FTA compliance, risk management, and penalty avoidance.

These Cabinet Decisions supplement and operate under Federal Decree-Law No. 8 of 2017 on VAT (as amended), forming part of the broader UAE VAT legislative framework.

This comprehensive guide explains the major Cabinet Decisions issued between 2018 and 2024 and how they impact businesses operating in the UAE.

UAE Cabinet Decision No. 41 of 2018

VAT Refund Scheme for Tourists

Issued: 24 July 2018 | Effective: 24 July 2018

Cabinet Decision No. 41 of 2018 introduced the UAE Tourist VAT Refund Scheme, allowing eligible non-resident tourists to reclaim VAT paid on goods purchased in the UAE.

Key Provisions:

• Applies to goods only (not services)
• Retailers must be registered under the approved refund system
• Goods must be exported within specified timelines
• Strict documentation and invoice requirements
• Minimum purchase threshold is AED 250 per tax invoice
• Refunds are processed through an FTA-authorised operator (currently Planet Tax Free), and retailers must integrate their POS systems with the approved electronic system
• Refund validation is completed at designated exit points (airports, ports, and border crossings)

Impact on UAE Businesses:

Retailers, especially in Dubai and Abu Dhabi tourism sectors, must:

• Ensure POS systems generate FTA-compliant tax invoices
• Integrate with the authorised VAT refund operator
• Maintain proper records for FTA audits
• Ensure real-time system compliance with the FTA-approved refund platform requirements

UAE Cabinet Decision No. 1 of 2020

Special VAT Refund Arrangements (International Events & Entities)

Issued: 2 January 2020 | Effective: 13 March 2018

This decision formalised VAT refund mechanisms relating to specific international arrangements, including large-scale global events hosted in the UAE.

Key Highlights:

• Retroactive effective date (March 2018)
• Allows eligible international participants to recover VAT
• Applies to qualifying supplies under official agreements
• Scope is limited to entities specified under international agreements approved by the UAE government (including Expo-related arrangements and designated diplomatic or international entities)

Business Considerations:

Contractors, event suppliers, and service providers involved in international exhibitions must:

• Review historic VAT treatment (from March 2018 onwards)
• Verify eligibility for refund claims
• Maintain supporting agreements and documentation, Cabinet Decision No. 9/12 O of 2020
• Confirm that the counterparty qualifies under an officially recognised agreement before applying special VAT treatment

Zero-Rating of Certain Medical Equipment

Issued: 1 September 2020

During the COVID-19 period, the UAE Cabinet introduced temporary zero-rating on certain medical equipment imports.

Key Elements:

• Specific medical goods list applies
• Time-bound zero-rating period
• HS code alignment required
• Strict import documentation required
• Applies only to specifically listed medical equipment identified through defined HS Codes and FTA guidance
• Zero-rating applied to both imports and local supplies of qualifying goods during the approved period

Compliance Risks:

Businesses that incorrectly applied zero-rating may face:

• VAT reassessments
• Administrative penalties
• Input tax recovery disputes

 

Healthcare providers and importers must ensure:

• Accurate product classification
• Proper customs documentation
• Alignment with FTA guidance
• Clear evidence that the goods fall within the officially approved HS code list

UAE Cabinet Decision No. 82 of 2022

Input Tax Refund for Mosque Construction & Operation

Issued: 16 August 2022 | Effective: 29 October 2022

This decision established a structured VAT refund regime for mosque construction and operational expenses.

Key Features:

• Applies to approved mosque operators
• Refund mechanism for input VAT incurred
• Application subject to FTA verification
• Documentation-heavy process
• Applies only to mosques and endowment entities approved by the competent authority
• This is a refund mechanism, not a zero-rating of supplies. Contractors must still charge VAT in the normal course of business.

For Contractors & Developers:

• Ensure contracts clearly identify qualifying projects
• Maintain invoice traceability
• File refund claims within prescribed timelines
• Ensure VAT is correctly charged on supplies, as the refund is claimed separately by the eligible mosque authority

Cabinet Decision No. 91 of 2023

Reverse Charge on Electronic Devices

Issued: 25 August 2023 | Effective: 60 Days After Official Gazette Publication

This decision introduced the Reverse Charge Mechanism (RCM) for certain electronic devices traded between VAT-registered businesses.

What is Reverse Charge?

Under RCM:

• Supplier does NOT charge VAT
• Buyer accounts for VAT in their VAT return
• Buyer may claim input tax (if eligible)
• The RCM applies only to specified electronic devices listed under the Decision and subject to defined conditions
• Both supplier and recipient must be VAT-registered
• The recipient must provide a written declaration confirming VAT registration status and that the goods are intended for resale or production purposes

Business Impact:

Electronics traders must:

• Update ERP tax codes
• Modify invoice formats
• Train finance teams on self-accounting entries
• Review contracts and pricing structures
• Obtain and retain valid recipient declarations as part of compliance documentation

 

Failure to comply may lead to:

• VAT mismatches
• FTA penalties
• Audit exposure

Cabinet Decision No. 127 of 2024

Reverse Charge Mechanism for Precious Metals & Stones

Issued: 16 December 2024 | Effective: 15 February 2025

This landmark decision significantly expanded reverse charge rules in the UAE precious metals sector.

It replaces earlier limited rules and applies broadly to precious metals and precious stones traded between VAT-registered businesses.

Key Changes:

• Wider product coverage
• Mandatory RCM between registrants
• Effective 15 February 2025
• Impacts wholesalers, refiners, traders, and jewellers
• Applies only where both parties are VAT-registered and the supply meets defined purity and product criteria under the Decision
• B2B qualifying supplies are subject to RCM, while retail (B2C) transactions remain subject to normal VAT rules

Immediate Action Required:

Businesses must:

• Update accounting systems
• Align inventory classifications
• Review B2B contracts
• Conduct VAT impact assessments
• Segregate B2B and B2C transactions clearly to avoid incorrect VAT treatment

Strategic VAT & Compliance Insights (2018–2025)

The pattern is clear:

• Expansion of reverse charge mechanisms
• Sector-specific VAT relief measures
• Increased documentation requirements
• Higher compliance scrutiny by FTA
• Targeted anti-fraud controls in high-risk trading sectors such as electronics and precious metals

 

For UAE businesses, this means:

• Stronger internal tax controls
• Regular VAT health checks
• ERP system alignment
• Professional VAT advisory support
• Robust documentation management, especially for reverse charge declarations and eligibility-based refund schemes

How German Fintax Consultancy Supports UAE Businesses

At German Fintax Consultancy, we provide:

• UAE VAT compliance advisory
• Reverse charge implementation support
• VAT refund application assistance
• FTA audit representation
• VAT health check & risk assessment
• Corporate tax & VAT integration advisory

 

We help businesses remain fully compliant with:

• UAE VAT Law
• Cabinet Decisions
• Ministerial Decisions
• FTA Guidelines
• Latest amendments and sector-specific reverse charge requirements effective up to 2025

Final Thoughts

The period from 2018 to 2024 has transformed the UAE VAT framework. Cabinet Decisions are no longer isolated legal updates; they directly impact cash flow, invoicing structures, supply chains, and compliance risk exposure.

With major reverse charge expansions now affecting electronics and precious metals, proactive tax planning is no longer optional.

Businesses should conduct periodic VAT impact assessments, particularly where sector-specific reverse charge rules apply, or eligibility-based refund mechanisms are involved.

If your business operates in trading, retail, healthcare, construction, or precious metals, now is the time to conduct a VAT compliance review.