Policy update

Policy & Legal Updates

UAE Implements Mandatory Supplier Due Diligence for Input VAT Recovery

Effective 1 October 2026, holding a valid tax invoice alone is no longer sufficient to recover input VAT in the UAE under FTA Decision No. 13 of 2026. Businesses must perform structured due diligence on suppliers and transactions to avoid denial of VAT deductions linked to supply chain evasion. Transactions over AED 375,000 on a rolling 12-month basis trigger enhanced verification requirements, including bank confirmation letters.

Policy & Legal Updates

US Imposes Sectoral Sanctions on Iran Car and Rail Industries Without Wind-Down

The US Treasury determined that Executive Order 13902 applies to Iran's automotive and rail sectors, effective October 1 with no wind-down period. The measures target Iranian manufacturers alongside international suppliers based in the UAE, Hong Kong, and mainland China. Foreign financial institutions facilitating transactions in these sectors now face secondary sanctions exposure.

Policy & Legal Updates

UAE Amends VAT Executive Regulation Under Cabinet Decision No. 149 of 2026

The UAE Cabinet has issued Decision No. 149 of 2026 amending the Executive Regulation of Federal Decree-Law No. 8 of 2017 on Value Added Tax, effective 1 October 2026. The revisions introduce an anti-fragmentation rule for supplies, restrict input VAT recovery on qualifying cash transactions, and clarify conditions for claiming input VAT on employee benefits. Further updates address financial services recovery criteria, medical products, profit margin schemes, capital assets, and tax credit notes.

Policy & Legal Updates

UAE Sets E-Invoicing Compliance Deadlines and Penalties for Businesses

A compliance advisory outlines statutory deadlines and penalties under the UAE's electronic invoicing regime. Companies with annual revenue of at least AED 50 million must appoint an Accredited Service Provider by October 30, 2026, ahead of the January 1, 2027 launch. Penalties for non-compliance include monthly fines of AED 5,000 and charges for unissued invoices.