UAE explains the metal scrap reverse charge under Cabinet Decision No. 153 of 2025

What changed in detail

The Federal Tax Authority published VAT Public Clarification VATP047, listed as new on the FTA guides page in October 2026, on the reverse charge for supplies of Metal Scrap between VAT registrants under Cabinet Decision No. 153 of 2025. The Decision applies to Metal Scrap supplied on or after 14 January 2026.

Under the reverse charge the recipient, not the supplier, accounts for the VAT on supplies of Metal Scrap made for resale or processing, subject to the Decision’s conditions. Both the supplier and the recipient must also meet additional compliance requirements before the date of supply.

Where the conditions are not met, the supplier must account for the VAT and the recipient cannot recover the related input tax under article 54(1)(a) and (b) of the VAT Law.

What it means

The risk sits mainly with the recipient. If a condition is missed, the supplier charges VAT in the normal way and the buyer loses the input tax claim, so the reverse charge is not something to apply by default. Both parties should confirm the pre-supply compliance requirements are met before the date of supply, and agree in advance who accounts for the tax. Supplies made before 14 January 2026 are outside the Decision.