Composite Supply — New Clarity for 2025
The updated VATP040 provides long-awaited clarity on how to treat mixed and composite supplies under UAE VAT Law, especially for sectors like retail, telecom, and real estate.
- Defines “principal” vs. “ancillary” supplies with practical case examples.
- Clarifies that bundled services follow the VAT rate of the main supply.
- Introduces a new threshold test to determine dominant supply value.
- Provides updated FTA guidance on how invoices should reflect composite structures.
Conclusion
Accurate supply classification now matters more than ever — wrong grouping means wrong tax rate.
Disclaimer: The Content offer general guidance and should not be considered legal, financial, or tax advice. Consult qualified professionals for personalized guidance. While efforts have been made to ensure accuracy, no guarantee is provided for completeness or applicability to individual situations. Users are responsible for their interpretation and actions based on this information, at their own risk.
For understanding more about Corporate Tax, VAT, Excise Tax, Financial Services, and Advisory Services, reach out to us on:mailto:contact@acme-group.me| +971 52 740 1169.
This article was published on 20 January 2026
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