UAE Updates Investment Fund Corporate Tax Exemption Window and VAT Recovery Regulations

The UAE Federal Tax Authority (FTA) issued Decision No. 15 of 2026, amending application rules for corporate tax exemptions covering investment funds and related structures. The measure expands the application filing window from 60 business days to 90 business days following the close of the financial period. It introduces a sequential filing requirement where parent investment funds must secure approved exemption status before their subsidiary holding entities can apply. In addition, a catch-up filing deadline of October 31, 2026, was set for entities wholly owned by government bodies. The FTA stressed that failing any exemption condition during any point in the tax period leads to the loss of exemption for that entire period.

Separately, revisions to the UAE Value Added Tax (VAT) framework took effect on October 1, 2026, primarily under Cabinet Decision No. 149 of 2026. The amended rules restrict input tax recovery for supplies exceeding a cash threshold to be set by the Minister of Finance when payments are made or intended to be made in cash, although the exact threshold remains unspecified. Furthermore, FTA Decision No. 13 of 2026 requires taxable businesses to take designated steps to verify supplier and supply validity before deducting input tax, while FTA Decision No. 17 of 2026 establishes specific input VAT recovery conditions for employee accommodation and workforce-related expenses.

Cabinet Decision No. 149 of 2026 also modifies rules governing the Capital Assets Scheme, single composite supplies, and the tax classification of medical products. According to the Ministry of Finance, an amended input tax apportionment methodology will apply from the first tax year beginning on or after October 1, 2027. Regarding the national e-invoicing framework, the Ministry confirmed that businesses generating over AED 50 million in annual revenue must appoint an Accredited Service Provider by October 30, 2026, ahead of mandatory rollout on January 1, 2027.