VAT adjustments required when leaving a tax group under FTA directive
If a Person ceases to be a member of a Tax Group but remains a Registrant for Value Added Tax (“VAT”) purposes, and there are adjustments relating to Taxable Supplies made or Taxable Expenses incurred by such Person prior to leaving the Tax Group, the Registrant shall be required to make such adjustments in its…
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- Applies to
- Tax · UAE
- What to do
- Registrants who exit a tax group must adjust their VAT returns for supplies and expenses previously declared by the group, and retain supporting documents.
The Federal Tax Authority has issued Directive No. 2 of 2026 on VAT adjustments following a registrant's exit from a tax group. The directive requires that if a person ceases to be a member of a tax group but remains VAT-registered, they must make adjustments in their tax returns for taxable supplies or expenses previously declared by the group. Adjustments include reductions in the value of taxable supplies and expenses where input tax was recovered. Registrants must retain supporting documents evidencing that the adjustments relate to supplies or expenses previously declared by the group. The directive takes effect from 1 August 2026.
Source
Source: FTA Legislation — official 10 Jul 2026 Read the original ↗ More from FTA Legislation →
Quick answers
What do I need to do?
Registrants who exit a tax group must adjust their VAT returns for supplies and expenses previously declared by the group, and retain supporting documents.
What was the deadline?
1 Aug 2026 — this deadline has passed.
Who issued this?
FTA Legislation (UAE).
When was it announced?
10 Jul 2026.
Where can I read the original?
Read the original at FTA Legislation: https://tax.gov.ae//Datafolder/Files/Legislation/2026/2026-02%20-%20VAT%20-%20Adjustment%20for%20VAT%20Group%20Members%20-%2007%202026.pdf
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