The Ministry of Finance has issued Cabinet Decision No. 149/2026 amending provisions of the Executive Regulation of the Federal Decree‑Law No. 8/2017 on Value Added Tax (VAT), introducing technical and regulatory updates to strengthen compliance and align with international best practices.
The amendments aim to simplify procedures, provide clarity for taxable persons, and reduce disputes by refining several aspects of VAT implementation. Key changes include updated provisions on the supply and import of medical products in line with the healthcare sector’s legislative framework, and clarification of rules on employee accommodation for input tax recovery.
The scope of the Capital Assets Scheme has been clarified to ensure consistency with the VAT Law, while the methodology for input tax apportionment has been refined to better reflect taxable persons’ economic activities. Government entities and charities will continue to apply the existing methodology.
New provisions address the VAT treatment of single composite supplies, ensuring taxation reflects the economic substance of transactions. The amendments also restrict input tax recovery for cash payments exceeding thresholds to be set by ministerial decision, a measure intended to mitigate tax evasion risks.
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