The proposed amendments would exempt investment fund management services, certain virtual asset services, and charitable donations, with the aim of strengthening the investment environment and supporting economic growth.
The UAE government has amended its Value Added Tax (VAT) law and introduced exemptions aimed at strengthening the domestic investment climate and supporting economic growth. In particular, investment fund management services will be exempted from VAT, a move aimed at boosting the sector.
In addition, certain services related to virtual assets will be eligible for tax exemption, although the Ministry has not yet specified which assets will be included.
In a further effort to promote social responsibility, in-kind donations between charities and government agencies will be exempt from VAT up to AED 5 million ($1.36 million) over a 12-month period. This arrangement will enable donors to recover the VAT incurred on their donations, reducing the financial burden and strengthening the social role of these organizations.
The amendments to Federal Decree-Law No. 8 of 2017 on VAT also give the Federal Tax Administration the power to deregister taxpayers under certain conditions, ensuring the integrity of the tax system.
The UAE’s 5% value-added tax, originally introduced in 2018, was part of a broader strategy to diversify the economy away from oil dependence. Other exemptions already in place cover a range of financial services, residential real estate, education and health services, further supporting the business sector.