Last week saw changes in UAE tax regulations: the FTA published several important decisions and guidelines on VAT and excise duty, including the Profit Margin Scheme, new rules for excise duty deductions, and the transition to a tiered-volumetric model for sweetened beverages from 2026.
Also in the digest: new regulations in realLaw AI (PPP in emergency situations, UAE investment agreements with Russia and New Zealand) and an announcement of a free webinar on 28 January on e-Invoicing in the UAE.
The FTA has published important decisions on VAT and excise duty:
1. FTA Profit Margin Scheme Value Added Tax Guide | VATGPM1.
The guide explains the rules for applying the profit margin scheme in the UAE. The scheme allows taxpayers to charge VAT at 5% not on the full sale price of the goods, but only on the difference (margin) between the purchase price and the sale price. This scheme is used to avoid "double" VAT, for example when reselling goods.
The scheme is only applicable to certain groups of goods that were already subject to VAT:
- Second-hand goods: tangible property suitable for further use in the same form or after repai...