UAE requires VAT Group leavers to make their own pre-exit adjustments
This page records one dated change. For the rules in United Arab Emirates as they stand today, see the United Arab Emirates guide →
- Jurisdiction
- 🇦🇪 United Arab Emirates
- Tax
- VAT
- Change type
- Compliance
- Status
- In force
- Impact
- Action required
- Announced
- 8 July 2026
- Effective
- 1 August 2026
- Instrument
- AE-DIRECTIVE-2-2026
- Authority
- UAE Federal Tax Authority
- Systems
- Reporting, ERP, Tax engine
- Verified
- Fetched from official source · high confidence
UAE VAT Registrants that have ceased to be a member of a VAT Tax Group but remain separately VAT-registered.
Where a UAE entity has left a VAT Tax Group but stays registered, make pre-exit supply and expense adjustments in its own returns from 1 August 2026 and retain the supporting documents.
ReportingERPTax engine
The UAE Federal Tax Authority issued Directive on Tax Transactions No. 2 of 2026 on 8 July 2026, requiring a Person who ceases to be a member of a VAT Tax Group but remains a VAT Registrant to make adjustments in its own Tax Returns for Taxable Supplies made or Taxable Expenses incurred before leaving the Tax Group, and to retain supporting documentation. The Directive is published in the Official Gazette and is effective from 1 August 2026.
What changed in detail
The UAE Federal Tax Authority issued Directive on Tax Transactions No. 2 of 2026 on 8 July 2026. It requires a Person who ceases to be a member of a VAT Tax Group but remains a VAT Registrant to make adjustments in its own Tax Returns for Taxable Supplies made or Taxable Expenses incurred before leaving the Tax Group, and to retain supporting documentation for those adjustments. The Directive is published in the Official Gazette and is effective from 1 August 2026.
What it means
Before this Directive, the mechanics of correcting output and input tax for supplies or expenses that straddled a Tax Group exit were not spelled out — the obligation now sits explicitly with the departed member, in its own post-exit return, not with the Tax Group’s representative member. Anyone restructuring a UAE VAT Group should build the pre-exit adjustment and its supporting documentation into the exit checklist rather than treating deregistration from the group as the end of the paper trail.
Proof
This Directive shall be published in the Official Gazette and be effective from 1 August 2026.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · FTA Directive on Tax Transactions No. 2 of 2026, issued 8 July 2026 · tax.gov.ae