September brought two VAT developments for UAE businesses: amendments to the VAT Executive Regulation under Cabinet Decision No. 149 of 2026, and the publication of FTA Decision No. 17 of 2026 on input tax recovery for certain employee expenses.
Executive Regulation amendments
The Ministry of Finance’s 8 September announcement covers medical products, employee accommodation, the Capital Assets Scheme, input-tax apportionment, single composite supplies and restrictions on recovering input tax for cash payments above a threshold to be prescribed by the Minister. Businesses should review the final legal text and identify which processes and expense controls are affected.
Employee expenses from 1 October
FTA Decision No. 17 of 2026 was issued on 9 September and published on 28 September. It sets cases and conditions for recovering input tax on certain employee expenses and takes effect on 1 October 2026. A general staff benefit should not be assumed recoverable: the expense must fit the decision’s rules and supporting evidence should be retained.
- Review employee expense and accommodation policies against the updated rules.
- Separate VAT recovery decisions by expense type and keep invoices and approval records.
- Update month-end review steps for expenses from 1 October onward.
- Monitor the Minister’s threshold decision for cash payments before claiming input tax on affected transactions.
Official sources: Ministry of Finance announcement on Cabinet Decision No. 149 of 2026 and FTA Decision No. 17 of 2026.
This summary is general information. Review the official decisions and their effective dates before changing VAT return treatment.
