UAE’s VAT Revamp (2024/25): What Public Clarification VATP040 Changes

On 14 March 2025, the UAE’s Federal Tax Authority issued Public Clarification VATP040 to clarify amendments under Cabinet Decision No. 100 of 2024, which became effective 15 November 2024. The changes affect how composite supplies, exports, financial services, and more are treated under VAT.

Key Changes:

• Redefined composite vs multiple supplies: Even if a combined supply is billed as one, if components are separately priced in a contract or invoice, it’s treated as multiple supplies.
• Expanded zero-rating rules for exports & transport: New clarifications on documentary proof, service exports, and transport legs.
• Financial services & virtual assets: Some financial services under Article 42 get new definitions/exemptions; virtual asset transfers now have clearer VAT treatment.
• New exceptions to what counts as a “supply”: Transfers or use of government buildings/assets between government entities now excluded.
• Input tax & apportionment tweaks: More detail on when input VAT is recoverable, especially for mixed supplies and partially taxable periods.

Conclusion

UAE VAT just got more complex. With Clarification VATP040, new rules for supplies, exports, finance, virtual assets, and input tax are here.

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