1. Introduction
1.1 Overview
1.1.1 Short brief
VAT is a general consumption tax on the supply of goods and services, that applies to most supplies which take place within the territorial area of the UAE.
1.1.2 Purpose of this document
The purpose of this Guide is to provide guidance on input tax apportionment and the special input tax apportionment methods which may be used by certain types of entities where the standard input tax-based apportionment method does not yield a fair and reasonable result.
The Guide provides:
- an overview of the general input tax apportionment rules and the available special methods of input tax apportionment;
- an overview of the process to apply for a special method of input tax apportionment; and
- the information needed to complete the form to apply for a special apportionment method.
For any additional questions regarding the process to apply for a special input tax apportionment method, please contact info@tax.gov.ae.
1.1.3 Who should read this document?
This document should be read by any registrant1 who makes a mixture of taxable and exempt supplies and any other person responsible for, or involved with the apportionment calculation for such a business.
1.1.4 Legislative references
In this Guide, Federal Decree-Law No. 8 of 2017 on Value Added Tax and its amendments is referred to as (“Decree-Law”) and Cabinet Decision No. 52 of 2017 on the Executive Regulation of the Federal Decree-Law No. 8 of 2017 on Value Added Tax and its amendments is referred to as (“Executive Regulation”).
1.1.5 Status of the Guide
This guidance is not a legally binding statement, but is intended to provide assistance in understanding and applying the VAT legislation with regards to input tax apportionment and special methods for input tax apportionment.
This guide replaces the Input Tax Apportionment: Special Methods VAT Guide (VATGIT1) published in December 2019 and March 2023.
Download the complete Input Tax Apportionment Guide – EN – 16 06 2023