MIDDLE EAST TAX ALERT | UAE | FTA Clarifies Output Tax, Self-Invoicing and Input Tax Recovery for Concerned Goods Imported Before 1 January 2026 (VATP045)
Overview
On August 25, 2026, the UAE Federal Tax Authority ("FTA") issued Public Clarification VATP045 addressing the historic treatment of goods imported from outside the UAE that would not have been exempt if supplied domestically.
As previously covered in our A&M Middle East Tax Alert, the requirement to issue self-invoices for imports subject to the reverse charge mechanism was removed with effect from January 1, 2026, under amended Article 48(1). VATP045 now provides further clarity on the treatment of imports made on or before December 31, 2025, including the documentation requirements and the conditions for recovering Input Tax.
Key Clarifications
| Area | FTA Position |
|---|---|
Output Tax | Under Article 48(1) of the VAT Law, a business importing goods into the UAE was treated as making a Taxable Supply to itself and was required to account for the related Output Tax. Businesses should reconcile the value of these imports and the related VAT against the amounts pre-populated in Box 6 of the VAT Return. Where the pre-populated amount is incorrect, or the goods were imported by a third party on the business's behalf, an adjustment should be made in Box 7. |
Self-Invoicing (pre-2026 imports) | In principle, a Tax Invoice to self was required within 14 days of the deemed supply. However, under Article 59(7)(b) of the UAE VAT Executive Regulation, the FTA may waive the Tax Invoice requirement where sufficient records are available to establish the details of the supply and issuing a Tax invoice would be impractical. |
FTA concession | Businesses do not need to issue a self-invoice or make a separate application for an administrative exception if they:
|
Input Tax recovery | Input Tax may still be recovered where no self-invoice was issued, provided the business is VAT-registered, the imported goods are used or intended to be used to make Taxable Supplies, and the relevant supporting documentation is retained. Recovery may be made in the Tax Period in which the supporting documents are obtained, and the Consideration is paid or intended to be paid within six months of the agreed payment date. |
A&M Comments
VATP045 provides useful clarification for businesses that did not historically issue self-invoices for imports but retained the underlying supplier invoice and relevant customs documentation.
Importantly, the FTA confirms that the absence of a self-issued Tax Invoice does not prevent Input Tax recovery where the relevant conditions are met. Businesses with significant historic imports of machinery, spare parts, or other goods should therefore consider whether the supporting documentation they hold and the VAT Return treatment applied are consistent with the clarification.
Recommended Steps
Businesses should consider:
- identifying imports made on or before December 31, 2025, where no self-invoice was issued and confirming that the overseas supplier invoice and relevant Emirate’s Customs declaration are available;
- where either document is unavailable, reviewing the historic VAT position and available supporting evidence, as the conditions set out in VATP045 for dispensing with the self-invoice requirement may not have been met;
- reconciling historic Box 6 and Box 7 entries against internal import records and assessing whether any discrepancies require correction; and
- noting that the historic self-invoicing requirement no longer applies to imports made from January 1, 2026, onwards, following the amendment to Article 48(1).
