Investment fund management services in the UAE will now be exempt from value-added tax (VAT), according to a new Cabinet decision.
The move will help stimulate growth in the investment management sector and increase the UAE’s attractiveness as a leading investment hub.
Moreover, certain services related to virtual assets will also be exempt from VAT as part of efforts to support innovation and advanced financial technology, further positioning the UAE as a prominent center for virtual asset investment.
Exemptions for some donations
The changes also introduce an exemption for in-kind donations between charitable and government entities, valued at up to AED5 million over a 12-month period, from the provisions of legal supply. This allows donors to recover the VAT incurred on these in-kind donations in accordance with the VAT law, aimed at easing the burden on these entities and enhancing their societal role.
Furthermore, the amendments will strengthen tax compliance by granting the Federal Tax Authority the authority to deregister taxpayers in specific cases, ensuring the integrity of the tax system and improving the efficiency of tax administration.
Minimizing misunderstandings
Younis Haji Al Khoori, undersecretary of the ministry of finance, said: “The ministry is committed to coordinating with relevant stakeholders from both the public and private sectors and working to update our regulations to enhance the UAE’s business environment.”
“We believe these amendments will help minimize misunderstandings or incorrect applications of the law, as well as simplify procedures for taxpayers in line with international best practices, ultimately contributing to an improved quality of life for all,” he added.
The ministry also highlighted that the changes are part of continuous efforts to refine the tax environment in the UAE, aiming to strike a balance between collecting tax revenues, boosting the investment climate, and attracting more businesses and investors to the country.
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