The UAE Federal Tax Authority (‘the FTA’) issued five Directives on various transactions (Nos. 1–5 of 2026), each addressing Value Added Tax (“VAT”) treatment in a specific technical area.
A summary of each of the Directive is set out below, together with its issuance and effective date. Businesses operating in the affected areas should assess the impact on their current VAT positions and compliance processes.
The following business may have an impact on account of the Directives:
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- Judicial expert services
- Entities part of a VAT groups and undergoing restructuring
- Taxpayers supplying digital assets or accepting consideration in the form of digital assets
- Insurance Service providers
- Entities making deemed supplies
Summary of FTA Directives
| Directive No/ 2026 |
Key Aspects |
- Judicial Expert Services
(Issued 8 July 2026)Download the copy of the FTA Directive from here
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Clarifies the VAT treatment of services rendered by experts appointed by the UAE Courts
- Where a natural or legal person listed on the Roster of Experts with the Ministry of Justice, a local judicial authority, or an arbitration centre (a “Judicial Expert”) is appointed by a competent Court to provide expert services, the same would be treated as supplied in the course of business and constitute taxable supplies
- Any amount received by the Judicial Expert for such services is a consideration for supply of services and requirement to comply with VAT obligation (including registration)
- Receiving the fee from a Government entity does not change the VAT treatment of the supply
Action Steps:
Judicial experts should review and assess the VAT registration requirement and ensure necessary steps are taken to comply with the VAT requirements |
- Adjustments for VAT Group Members after Exit
(Issued 8 July 2026)Download the copy of the FTA Directive from here
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Addresses how output tax and input tax adjustments are made once a member leaves a VAT (Tax) Group
- If a person leaves a Tax Group but remains separately VAT-registered, all adjustments relating to taxable supplies made or taxable expenses incurred before it left the group, must be made by the person (not the group) in its own VAT returns even where the original supply/ expense was declared in the Tax Group’s returns
- Covered adjustments include reductions in the value of taxable supplies previously declared by the Tax Group, and reductions in the value of taxable expenses for which input tax was previously recovered by the Tax Group
- Documents and records evidencing adjustments relate to supplies/expenses previously declared in the Tax Group’s returns must be retained
Action Steps:
Ensure processes are in place before 1 August 2026 to make output/input tax adjustments in the VAT returns |
- Converting Digital Currency Value into AED
(Issued 14 July 2026)Download the copy of the FTA Directive from here
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Sets out a mandatory mechanism for converting digital currency values into UAE Dirham for VAT reporting.
- Applies where a taxable person supplies a digital currency, or supplies goods/services for which consideration is received in digital currency. The value in such cases must be converted to AED for the Tax Return
- Specific mechanism prescribed for conversion using three exchange platforms from the FTA’s published list of centralised public digital currency exchange platforms
- Supporting records evidencing the rates obtained from each platform must be retained, in addition to standard record-keeping obligations
- The FTA will publish a public clarification on the procedure to follow if a rate is not available on three listed platforms
Action Steps:
Businesses dealing in digital currencies should adopt the prescribed platform averaging methodology and monitor the FTA’s published platform list |
- Fees and Charges under Life Insurance/ Reinsurance Contracts
(Issued 14 July 2026)Download the copy of the FTA Directive from here
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- Under a life insurance/reinsurance contract, connected services are treated as part of the VAT exempt life insurance supply provided they are:
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- necessary for and directly connected with that supply, and
- their consideration forms an integral part of the total consideration payable under the contract
- Exemption only applies where the related fees/charges are embedded within the insurance premium and no separate consideration is charged for them
- Fees for management, operation, or execution of the contract (and similar services) may fall within the exempt treatment if the conditions are met
- Services that are independent in nature, not essential to the contract, or separately charged, remain independent supplies for VAT purposes and shall be assessed on the facts and circumstances of each case
Action Steps:
Insurers/reinsurers should review fee structures for life insurance/ reinsurance contracts to confirm which ancillary charges qualify for exempt treatment and consider charging VAT in all other cases |
- Valuation of Deemed Supplies of Services
(Issued 20 July 2026)Download the copy of the FTA Directive from here
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Prescribes the methodology for valuing a deemed supply of services under Article 37 of the VAT Law which (i.e., value of deemed supply except in case of deemed supply to Related Parties)
- The value of a deemed supply of services is based on the total costs (direct and indirect) on which input tax was incurred to make that supply
- The Directive clarifies the mechanism to be adopted for calculation of total cost with specific examples
Action Steps:
- Businesses making deemed supplies of services should align cost-allocation methodology with the Directive mechanism
- Adjust the accounting policies to maintain the details for calculation of taxable and non-taxable expenses for calculation of input
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Businesses should evaluate the impact of such transactional directives and ensure necessary action to comply with the positions specified in the Directives as the same may be legally binding. Such Directives are a positive step ensuring more clarity on specific transactions to avoid litigations are a subsequent stage
