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

The UAE Cabinet has issued Cabinet Decision No. 149 of 2026, introducing wide-ranging amendments to the Value Added Tax Executive Regulation. Most provisions take effect on October 1, 2026, revising rules across ten key areas including composite supplies, cash purchase deductions, and healthcare goods. A revised standard input tax apportionment mechanism will be deferred until after October 1, 2027.

Published Source: Alketbi Law Firm
Issuing authority
UAE Cabinet
Jurisdiction
United Arab Emirates
Publication date
September 30, 2026
Effective date
October 1, 2026
Stage
Amendment
Official document
Cabinet Decision No. 149 of 2026
Official source
alketbilaw.com
Photo: Alketbi Law Firm

The UAE Cabinet issued Cabinet Decision No. 149 of 2026 to enact comprehensive amendments to the Value Added Tax (VAT) Executive Regulation, according to an analysis by Alketbi Law Firm. Most provisions under the new decision are set to become effective on October 1, 2026.

The regulatory changes modify VAT rules across ten specific areas, including composite supplies, the profit margin scheme, zero-rated healthcare products, and employee accommodation.

Under amended Article 54(3), the regulation establishes that input VAT recovery will be disallowed on purchases settled in cash above a monetary threshold to be determined by the Minister of Finance. Additionally, new rules for composite supplies introduce an economic substance test requiring interconnected goods or services to be treated as a single unified supply.

A major overhaul to Article 55 concerning the standard input tax apportionment mechanism has been deferred, taking effect from the first tax year starting after October 1, 2027.

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