The UAE Ministry of Finance has introduced significant amendments to its VAT executive regulations, marking a strategic move to bolster tax compliance and minimize evasion risks. Under Cabinet Decision No. 149 of 2026, the government is placing new limits on input tax recovery for large cash transactions, with specific thresholds to be defined by the Minister of Finance soon. This update is part of a wider initiative to harmonize the nation’s tax framework with global standards, ensuring that business practices remain robust, transparent, and aligned with modern legislative requirements.

Beyond addressing cash payments, these reforms introduce technical refinements aimed at simplifying tax obligations for businesses. Key updates include updated guidelines for the import and supply of medical products, clearer rules regarding input tax recovery for employee housing, and improved methodologies for the Capital Assets Scheme and input tax apportionment. By focusing on the economic substance of transactions—particularly regarding composite supplies—the government aims to reduce tax disputes and foster a more stable environment for taxpayers, ultimately ensuring the VAT system evolves alongside the country’s dynamic economic landscape.