In this edition, we present the latest developments in both direct and indirect taxation across the UAE. The newsletter highlights key legislative updates, recent FTA clarifications, compliance insights, and the progress of e-invoicing implementation.
The FTA issued a Public Clarification CTP009 on 26 September 2025 titled Application of the valuation method under the transitional rules as set out in Ministerial Decision No. 120 of 2023.
The purpose of this clarification is to explain the application of the valuation method under Article 2(2)(a) to real estate developers making off-plan sales and recognizing revenue over the construction period.
The adjustment under the transitional rules applies to Qualifying Immovable Property, i.e. Immovable Property that meets all of the conditions set out in Article 2(1) of Ministerial Decision No. 120 of 2023.
For real estate developers, the FTA considers the Qualifying Immovable Property to be either the entire project or specific unit(s) within the project.
For the purposes of the application of the transitional rules, “Disposal” or “deemed disposal” should follow the principles of the Accounting Standards applied by the Taxable Person. Where revenue is recognised as the performance obligation is satisfied in accordance with IFRS 15 such revenue recognition is considered a “disposal” or “deemed disposal”.
Under Article 2(2)(a) of Ministerial Decision No. 120 of 2023, the excluded gain is calculated as the difference between the Market Value of the Qualifying Immovable Property at the start of the first Tax Period, and the higher of its original cost or net book value.
The Market Value at the start of the first Tax Period shall be determined by the relevant government competent authority in the UAE.
For the purposes of the calculation of the adjustment under the valuation method, the original cost and net book value should be determined in respect of the Qualifying Immovable Property only.
Step 1: Calculation of the overall excluded gain for each Qualifying Immovable Property element by deducting the higher of the original cost and net book value from the Market Value.
Step 2: Apportionment of the excluded gain for the relevant Tax Period on the basis of revenue recognition under the applicable Accounting Standards.
Step 3: Determination of the accounting profits attributable to the Qualifying Immovable Property element on a fair and reasonable basis.
Step 4: The excluded gain is used for adjustment of the accounting profits in each relevant Tax Period up to the amount of such accounting profits.
FTA Clarifies Corporate Tax Treatment for Family Wealth Management Structures in the UAE
The Federal Tax Authority (FTA) issued Public Clarification CTP008 on September 19, 2025 on the Corporate Tax treatment of family wealth management structures.
A Family Foundation can make an application to the FTA to be tax transparent if it meets the conditions of Article 17(1) of the Corporate Tax Law.
Any holding vehicles or SPVs that are wholly owned and controlled by a tax transparent Family Foundation may make an application to be tax transparent if they meet the conditions of Article 17(1).
Where an SFO or MFO is a juridical person that does not meet the conditions of Article 17 of the Corporate Tax Law, it is a Taxable Person and is subject to Corporate Tax.
The family members will not be subject to Corporate Tax on any income earned from family wealth management vehicles.
MoF Issues Ministerial Decision No. 229 of 2025 on Qualifying and Excluded Activities Under the CT Law
The Ministry of Finance has issued Ministerial Decision No. 229 of 2025, replacing Ministerial Decision No. 265 of 2023. The new Decision consolidates and updates the definitions, structure, and qualifying conditions applicable to Free Zone Persons.
The scope of treasury and financing activities.
The definition of trading of Qualifying Commodities.
The list of Excluded Activities remains consistent with the prior Decision, with refined drafting for interpretive clarity.
Ministerial Decision No. 229 of 2025 reiterates the requirement that Qualifying Free Zone Persons prepare and maintain audited financial statements and comply with all conditions specified under the UAE Corporate Tax Law.
Cabinet Decision No. 100 of 2025 – Amendment to the VAT Executive Regulation
As part of the UAE’s upcoming mandatory e-Invoicing implementation, the Federal Tax Authority (FTA) has issued Cabinet Decision No. 100 of 2025, effective 29 September 2025, amending the VAT Executive Regulation.
Businesses will no longer be permitted to issue simplified tax invoices for transactions below AED 10,000. All taxable supplies must be supported by a Full Tax e-Invoice.
It is now compulsory to issue Full Tax e-Invoices for all taxable supplies, including exports.
Credit notes no longer need to reflect the full details of the original invoice.
All previous administrative exceptions related to invoicing have been withdrawn.
Ministerial Decisions No. 243 & 244 of 2025 on the Implementation of the UAE Electronic Invoicing System
The Ministry of Finance has issued the regulatory framework for the mandatory implementation of the eInvoicing system in the UAE.
All businesses conducting Business Transactions within the UAE fall under the eInvoicing regime regardless of their VAT registration status.
All businesses obligated to issue eInvoices must appoint an Accredited Service Provider approved by the Ministry of Finance.
For VAT-registered businesses, eInvoices and eCredit Notes must be issued in accordance with the timelines prescribed under the UAE VAT Law. Non-VAT-registered businesses must issue within 14 days.
In certain scenarios, eInvoice issuance may be conducted by parties other than the primary supplier:
Agent Issuance: When an agent acts on behalf of a principal, the agent may issue and transmit the eInvoice on behalf of the principal.
Self-Billing: In cases of self-billing, the recipient may issue an eInvoice or eCredit Note on behalf of the supplier, provided both are VAT-registered.
Tax Procedures Law Compliance: Record keeping provisions apply to eInvoices and eCredit Notes.
Ministry of Finance Data Access: The MoF has the power to access and use data processed under the eInvoicing system.
Data Sharing: Data may be shared with other Government entities and foreign government bodies.
Revenue above AED 50 Million – ASP Appointment: 31 Jul 2026 – Go-Live: 1 January 2027
Revenue below AED 50 Million – ASP Appointment: 31 Mar 2027 – Go-Live: 1 July 2027
Government Entities – ASP Appointment: 31 Mar 2027 – Go-Live: 1 October 2027
Businesses may choose to implement the eInvoicing system on a voluntary basis starting 1 July 2026. The MoF has launched a Pilot Programme to facilitate testing and early adoption.
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