Legislation Details
- Full Title: Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes
- Law Type: Cabinet Resolution
- Law Number: No. (153) of 2025
- Issued Date: 04 Nov 2025
- Effective Date: 13 Jan 2026
- Official Gazette: No. 811
- Sector: Tax
- Status: Active
- Number of Articles: 12
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution establishes the application of the reverse charge mechanism to the trade of scrap metal between registrants in the UAE for value added tax (VAT) purposes. It aims to simplify the VAT compliance process for businesses engaged in the scrap metal trade. The resolution specifies the obligations of both the supplier and recipient of scrap metal, as well as the conditions under which the reverse charge mechanism applies. This legislation is important for businesses in the scrap metal industry, as it provides clarity on their VAT obligations and helps streamline their tax compliance. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to apply the reverse charge mechanism to the trade of scrap metal between registrants in the UAE for VAT purposes. The purpose is to simplify the VAT compliance process for businesses engaged in the scrap metal trade. The resolution aims to clarify the obligations of both the supplier and recipient of scrap metal, and the conditions under which the reverse charge mechanism applies. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 2)
What are the key definitions under this law?
The Cabinet Resolution provides the following key definitions:
- Scrap Metal: Ferrous or non-ferrous metal waste that has commercial value and can be used after processing. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 1)
- Processing: The process through which Scrap Metal is transformed into materials usable in the manufacture of new products, whether by repair, recycling, or any other method. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 1)
What are the main obligations and requirements?
The main obligations and requirements under this Cabinet Resolution are: 1. The supplier of scrap metal shall not be responsible for accounting for the VAT related to the supply and shall not include it in its tax return. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 2(1)(a)) 2. The recipient of scrap metal shall be responsible for accounting for the VAT due on the supply and for all related tax obligations. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 2(1)(b)) 3. The recipient of scrap metal shall submit a written declaration to the supplier stating that the supply is for the purposes of resale or processing, and that the recipient is registered with the Federal Tax Authority. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 2(3)(a)) 4. The supplier of scrap metal shall receive and retain the declarations from the recipient, verify the recipient's registration, and include an explicit statement on the invoice indicating the application of the reverse charge mechanism. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 2(3)(b))
What exemptions or exceptions apply?
The provisions of the reverse charge mechanism do not apply if the supply of scrap metal is subject to VAT at the zero rate in accordance with Clause (1) of Article (45) of Federal Decree by Law No. (8) of 2017 Regarding Value Added Tax. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 2(2))
How does this law interact with other UAE legislation?
This Cabinet Resolution is related to the following UAE legislation: - Federal Decree by Law No. (13) of 2016 Regarding the Establishment of the Federal Tax Authority, as amended - Federal Decree by Law No. (8) of 2017 Regarding Value Added Tax, as amended - Cabinet Resolution No. (52) of 2017 Regarding the Executive Regulations of Federal Decree by Law No. (8) of 2017 Regarding Value Added Tax, as amended (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Preamble)
When did this law come into effect?
This Cabinet Resolution shall enter into force after 60 days from the date of its publication in the Official Gazette, which was on 14 November 2025. (Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes, 2025, Art. 5)
Source Documents
This article analyses Cabinet Resolution Regarding the Application of the Reverse Charge Mechanism to the Trade of Scrap Metal between Registrants in the State for Value Added Tax Purposes for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.