Federal Decree-Law No. (18) of 2022 (the VAT Amendment Law), issued on Sept. 26, 2022, makes a number of important changes to the United Arab Emirates VAT Law (Federal Decree-Law No. 8 of 2017), from Jan. 1, 2023. 


  1. The supplier needs to issue a tax credit note to the buyer/recipient to claim back the excess output tax charged on a tax invoice in prescribed scenarios e.g. discounts, sales returns, sales cancellation, and so on. Also, the buyer/recipient is obliged to reverse the proportionate input tax credit recovered on the original invoice.  Effective January 1, 2023, the supplier could claim back the output tax only if the tax credit note is issued within 14 days from the date when the prescribed scenario took place. Once the 14 days period has lapsed, VAT could become a cost in the value chain and the seller would lose the right to claim back excess output tax paid.

  2. The FTA can undertake a tax audit, or issue a tax assessment more than five years after the end of a tax period if they notify the taxpayer of a tax audit before the end of the five-year period, and either complete the audit or issue a tax assessment within four years from the date they notified the taxpayer of the tax audit.

  3. Since 2018, any person who receives an amount as VAT pursuant to any document issued by him was rightly obliged to pay the amount to the FTA even if it is not due. According to the updated provision any person issuing a tax invoice in respect of an amount is required to pay the amount to the FTA.
  4. The taxpayers will need to receive and retain invoices for any import of service on which a reverse charge is applicable. The obligation to receive and retain invoices and import documents will equally apply to the import of goods.

  5. Taxpayers would be required to submit a voluntary disclosure to correct an error or omission even if such error or omission does not result in any change in net tax due reported in the original VAT return. Once a voluntary disclosure is submitted, penalties could also apply for the errors in the original VAT returns.

  6. From  01/03/2023, the maximum amount of administrative penalties would be restricted to 200% of the tax amount. However, the minimum threshold of Dh500 for penalties would be removed thereby allowing the FTA to impose penalties less than Dh500 as well.

Credit : https://www.khaleejtimes.com/business/uae-vat-next-5-important-changes-you-should-know