UAE Updates VAT Rules on Cash Payments, Staff Housing and Medical Supplies

UAE, 16 September, 2026: The UAE Ministry of Finance has introduced amendments to the VAT Executive Regulations, covering cash payments, employee accommodation, medical products and input tax recovery.

Under Cabinet Decision No. 149 of 2026, new restrictions will apply to input tax recovery where cash payments exceed thresholds to be prescribed separately by the Minister of Finance. The measure is aimed at strengthening compliance and reducing tax-evasion risks.

The amendments also clarify VAT treatment of employee accommodation and refine the input tax apportionment methodology. The existing methodology for government entities and charities remains unchanged.

In addition, VAT provisions relating to the supply and import of medical products have been updated to align with the UAE’s revised healthcare legislation.

The amendments also introduce clearer rules for single composite supplies and clarify the scope of the Capital Assets Scheme.

The Ministry said the changes are intended to simplify VAT procedures, improve transparency, reduce disputes and keep the UAE VAT framework aligned with economic and legislative developments.