UAE Ministry of Finance (“MoF”) Introduces Reverse-Charge VAT Mechanism for Scrap Metal Trading.
The UAE MoF has issued a Cabinet Decision No. 153 of 2025, regarding the application of the reverse charge mechanism on trading of metal scrap between registrants in the UAE, effective from 14.01.2026.
Key Takeaways:
- VAT liability shifts to the recipient of scrap-metal supplies, provided both parties are VAT-registered and procedural conditions are met.
- Applies to specific types of scrap and recycled metal used for resale or industrial processing.
- Suppliers will be required to secure confirmations and declarations from buyers to ensure eligibility.
- The policy aims to prevent VAT carousel fraud, strengthen market oversight, and align VAT practice with global standards.
- The change will support transparency, discourage misuse of VAT credits, and promote responsible compliance within the industry.
- Businesses dealing in scrap metals are advised to review documentation processes and VAT reporting readiness ahead of enforcement.
UAE Ministry of Finance (“MoF”) Announces VAT Law Amendments effective January 2026.
The MoF has announced the issuance of Federal Decree-Law No. (16) of 2025 amending certain provisions of Federal Decree-Law No. (8) of 2017 on VAT, which will enter into force as of 01.01.2026.
Key Takeaways:
- Taxpayers are required to verify the legitimacy and integrity of supplies before deducting input tax, in line with the procedures and measures set out by the FTA.
- A statutory deadline of five years is introduced for claiming VAT refunds and adjusting tax credits, supporting financial certainty.
- The amendments clarify that Voluntary Disclosures (VDs) will no longer be mandatory for every error discovered in a tax return where there is no difference in the amount of due tax.
- The law now introduces a five-year limitation period for submitting refund applications for tax credit balances, calculated from the end of the tax period in which the credit arose.
- The amendments introduce a new Article 54b is in Federal Decree Law, empowering the FTA to deny input tax deductions where the underlying supply, or any part of the supply chain, is linked to tax evasion.
- Businesses will no longer need to self-issue tax invoices for imports of goods and services subject to the reverse charge mechanism from 01.01.2026.
UAE Tax and Company Law Reforms Coming into effect in 2026.
The UAE has announced comprehensive reforms to corporate tax, VAT processes, and commercial company regulations effective 2026.
Key Takeaways:
- Corporate tax reforms focus on clearer utilisation of tax credits, improved transfer-pricing alignment and enhanced compliance structure.
- VAT amendments complement tax reforms by simplifying procedures and aligning UAE practice with international standards.
- Reforms reinforce the UAE’s commitment to transparency, global market competitiveness, and regulatory certainty.
- Updates to company law will streamline business formation, governance and operational frameworks, strengthening investor confidence.
- Entities operating in the UAE are encouraged to review existing structures, governance, and tax practices to benefit from the reforms.
UAE Introduces Federal Decree Law Governing National School Curriculum.
The UAE issued a new federal law on higher education and scientific research on 30.12.2025 to regulate the sector, strengthen governance and effective management of the education institutions issued under the authority of the federal government and overseen by the Ministry of Higher Education and Scientific Research (“MoHESR”).
Key Takeaways:
- The new law establishes a comprehensive federal legislative framework governing all aspects of higher education, scientific research, and technical and vocational education and training (TVET) across the UAE.
- The legislation introduces comprehensive rules governing the licensing and classification of higher education institutions, as well as the accreditation of academic programmes.
- The law further regulates electronic, digital, and blended education, setting standards for the accreditation of academic and professional programmes while safeguarding data protection and intellectual property rights.
- The decree mandates the periodic classification and evaluation of higher education institutions, with results to be published publicly.
- All licensed higher education institutions in the UAE are subject to periodic classification and evaluation processes conducted by the MoHESR.
The Decree Law includes specific regulatory provisions for higher education institutions in free zones.
