The UAE Government has recently introduced amendments to the VAT Law, which will be effective from January 1, 2023. The following are the key amendments based on the unofficial translation available in the public domain:

1. Statute of Limitation (SOL) – Article 79 (Bis):
   • A new article on SOL has been inserted in the VAT Law.
   • SOL sets a timeframe within which tax authorities must complete a tax audit or issue a tax assessment.
   • Unaudited businesses should be prepared for a tax audit notice in the first half of 2023, and ongoing audits may experience extended inquiries.
2. Tax Procedures Law [Article 83 amended]:
   • The SOL provisions in the VAT Law supersede the SOL provisions in the Tax Procedures Law.
   • The Tax Procedures Law will still apply in cases where there is no similar provision in the VAT Law.
3. Pure Hydrocarbons [Article 48 amended]:
   • The reverse charge provisions now explicitly apply only to pure hydrocarbons, providing clarity on their application.
4. Timeline for raising tax invoices for continuous contracts and raising tax Credit Notes [Article 67 and 62 amended]:
   • Timelines for raising tax invoices and tax credit notes have been clarified.
   • Tax invoices for continuous supplies should be issued within 14 days from the date of supply.
   • Tax credit notes for adjusting output tax in specific instances should be issued within 14 days from the date of the adjustment event.
5. Input VAT recovery on import of goods and services [Article 55 amended]:
   • Concrete conditions have been imposed for documentary evidence for input VAT recovery on import transactions.
   • Businesses must verify the date of receipt of relevant documents before recovering input VAT on import transactions.
6. New place of supply provision for continuous/periodic supplies [Article 27 (3) (a) (4) added]:
   • The place of supply for supplies involving the import or export of goods with periodic payments or multiple invoices is clarified.
   • If the ownership of the goods is transferred in the UAE, the place of supply will be in the UAE.
7. Place of supply of transport-related services [Article 30 (8) amended]:
   • The amendment combines the place of supply rules for transportation services and transport-related services into one provision of the VAT Law.

Taxable persons are advised to review the amendments to the VAT Law and ensure readiness by January 1, 2023. These changes will impact certain areas, such as inventories of hydrocarbons, import of means of transportation, timeframes for tax invoices and credit notes, and bookkeeping procedures.