{"id":14273,"date":"2025-12-27T05:19:29","date_gmt":"2025-12-27T05:19:29","guid":{"rendered":"https:\/\/mbbauditing.com\/staging\/8512\/?p=14273"},"modified":"2026-07-20T05:29:59","modified_gmt":"2026-07-20T05:29:59","slug":"explaining-cabinet-decision-no-153-of-2025-reverse-charge-mechanism-for-metal-scrap-trading-in-the-uae","status":"publish","type":"post","link":"https:\/\/mbbauditing.com\/staging\/8512\/explaining-cabinet-decision-no-153-of-2025-reverse-charge-mechanism-for-metal-scrap-trading-in-the-uae\/","title":{"rendered":"Explaining Cabinet Decision No. 153 of 2025: Reverse Charge Mechanism for Metal Scrap Trading in the UAE"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"14273\" class=\"elementor elementor-14273\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1c8b499 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1c8b499\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-7a2bc43\" data-id=\"7a2bc43\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2f1ed2d elementor-widget elementor-widget-text-editor\" data-id=\"2f1ed2d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><b>Introduction<\/b><\/p><p><span style=\"font-weight: 400;\">The UAE Ministry of Finance has issued <\/span><b>Cabinet Decision No. 153 of 2025<\/b><span style=\"font-weight: 400;\">, introducing a significant change to the VAT treatment of metal scrap transactions within the UAE. The Decision mandates the application of the <\/span><b>Reverse Charge Mechanism (RCM)<\/b><span style=\"font-weight: 400;\"> on certain local supplies of metal scrap between VAT-registered businesses. This regulatory update is aimed at improving VAT compliance while reducing administrative burdens for businesses operating in the metal scrap supply chain.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3d61001 elementor-widget elementor-widget-heading\" data-id=\"3d61001\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Publication and Effective Date\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5342472 elementor-widget elementor-widget-text-editor\" data-id=\"5342472\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Cabinet Decision No. 153 of 2025 was issued on <\/span><b>14 November 2025<\/b><span style=\"font-weight: 400;\"> and published in the <\/span><b>Official Gazette on 26 November 2025<\/b><span style=\"font-weight: 400;\">. In accordance with the Decision, it will come into force <\/span><b>60 days from the date of publication<\/b><span style=\"font-weight: 400;\">, making it effective from <\/span><b>14 January 2026<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-37328e6 elementor-widget elementor-widget-heading\" data-id=\"37328e6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Overview of the Reverse Charge Mechanism<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d0c21f4 elementor-widget elementor-widget-text-editor\" data-id=\"d0c21f4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Under the Reverse Charge Mechanism introduced by this Decision, the responsibility for accounting and reporting VAT shifts from the <\/span><b>supplier<\/b><span style=\"font-weight: 400;\"> to the <\/span><b>recipient<\/b><span style=\"font-weight: 400;\"> of metal scrap, provided specific conditions are met. Instead of charging VAT on the invoice, the supplier issues the supply without VAT, and the recipient accounts for VAT directly in their VAT return.<\/span><\/p><p><span style=\"font-weight: 400;\">This approach is intended to streamline VAT administration, particularly in sectors where VAT leakage and compliance challenges have historically been observed.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-22bbb7b elementor-widget elementor-widget-heading\" data-id=\"22bbb7b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Scope of Application<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c852e1c elementor-widget elementor-widget-text-editor\" data-id=\"c852e1c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The Decision applies to the <\/span><b>local supply of metal scrap between VAT-registered persons in the UAE<\/b><span style=\"font-weight: 400;\">. Metal scrap is defined as waste of <\/span><b>ferrous or non-ferrous metals<\/b><span style=\"font-weight: 400;\"> that retains commercial value and can be reused after processing.<\/span><\/p><p><span style=\"font-weight: 400;\">The Reverse Charge Mechanism applies only where the recipient intends to:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Resell the metal scrap<\/b><span style=\"font-weight: 400;\">, or<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Use it for processing<\/b><span style=\"font-weight: 400;\">, such as recycling, repair, or conversion into usable materials for manufacturing.<\/span><\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-fbc5dfd elementor-widget elementor-widget-heading\" data-id=\"fbc5dfd\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Transactions Excluded from the Decision<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0d2561a elementor-widget elementor-widget-text-editor\" data-id=\"0d2561a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The Decision explicitly excludes metal scrap supplies that qualify as <\/span><b>zero-rated exports<\/b><span style=\"font-weight: 400;\"> under UAE VAT legislation. Such transactions will continue to follow the existing VAT rules applicable to exports and are not subject to the reverse charge treatment.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c6335ca elementor-widget elementor-widget-heading\" data-id=\"c6335ca\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Obligations of the Recipient\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cf6e1f1 elementor-widget elementor-widget-text-editor\" data-id=\"cf6e1f1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">To apply the Reverse Charge Mechanism, the recipient must fulfill specific compliance requirements <\/span><b>before the date of supply<\/b><span style=\"font-weight: 400;\">, including providing a written declaration to the supplier confirming:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Their <\/span><b>VAT registration status<\/b><span style=\"font-weight: 400;\"> with the Federal Tax Authority (FTA), and<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That the metal scrap is being acquired <\/span><b>for resale or further processing<\/b><span style=\"font-weight: 400;\">, as defined under the Decision.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">If the recipient fails to provide this declaration, the Reverse Charge Mechanism does not apply, and the supplier becomes liable to charge and account for VAT in the normal manner.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5d8cc17 elementor-widget elementor-widget-heading\" data-id=\"5d8cc17\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Obligations of the Supplier\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-28dbe21 elementor-widget elementor-widget-text-editor\" data-id=\"28dbe21\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Suppliers also have defined responsibilities under the Decision. These include:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Verifying the recipient\u2019s VAT registration status<\/b><span style=\"font-weight: 400;\"> with the FTA using approved verification methods, and<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensuring that the <\/span><b>tax invoice clearly states<\/b><span style=\"font-weight: 400;\"> that the transaction is subject to the Reverse Charge Mechanism.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Receive &amp; retain the declaration as provided by the recipient of metal scrap.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">Accurate invoicing and proper documentation are critical to demonstrate compliance and mitigate potential VAT exposure.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7619037 elementor-widget elementor-widget-heading\" data-id=\"7619037\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Documentation and Record-Keeping\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1c6d9bd elementor-widget elementor-widget-text-editor\" data-id=\"1c6d9bd\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Both suppliers and recipients must maintain <\/span><b>robust documentation<\/b><span style=\"font-weight: 400;\">, including written declarations, VAT registration verification, invoices, and transaction records. These documents must be retained in accordance with UAE VAT law to support VAT reporting and withstand potential audits by the FTA.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7b097d6 elementor-widget elementor-widget-heading\" data-id=\"7b097d6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Key Business Implications\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-101f93e elementor-widget elementor-widget-text-editor\" data-id=\"101f93e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Businesses involved in the metal scrap supply chain should proactively review their:<\/span><\/p><ul><li><span style=\"font-weight: 400;\">Supply contracts and commercial arrangements<\/span><\/li><li><span style=\"font-weight: 400;\">Invoicing and accounting systems<\/span><\/li><li><span style=\"font-weight: 400;\">Internal VAT controls and compliance procedures<\/span><\/li><li><span style=\"font-weight: 400;\">Staff training and awareness around VAT reporting<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">Early preparation is essential to ensure a smooth transition and to avoid penalties once the Decision becomes effective in January 2026.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f606f69 elementor-widget elementor-widget-heading\" data-id=\"f606f69\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">How MBB Auditing Can Support Your Business<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-85398b1 elementor-widget elementor-widget-text-editor\" data-id=\"85398b1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><b>MBB Auditing<\/b><span style=\"font-weight: 400;\">, a Dubai-based audit and tax advisory firm, supports businesses in navigating regulatory changes such as Cabinet Decision No. 153 of 2025 with confidence and clarity. Our services include:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>VAT impact assessments<\/b><span style=\"font-weight: 400;\"> to determine how the Reverse Charge Mechanism affects your metal scrap transactions<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Review and redesign of VAT processes<\/b><span style=\"font-weight: 400;\">, invoicing formats, and internal controls<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Recipient and supplier compliance support<\/b><span style=\"font-weight: 400;\">, including documentation and declaration frameworks<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>VAT return preparation and review<\/b><span style=\"font-weight: 400;\"> to ensure accurate reverse charge reporting<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ongoing advisory and FTA liaison<\/b><span style=\"font-weight: 400;\">, reducing the risk of penalties and disputes<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">MBB Auditing is well-positioned to assist UAE businesses in achieving full compliance while maintaining operational efficiency under the new VAT framework. <a href=\"https:\/\/vac.wrc.mybluehost.me\/contact-us\/\" rel=\"nofollow noopener\" target=\"_blank\">Click here<\/a> to fill the form, and our team will get in touch with you.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Introduction The UAE Ministry of Finance has issued Cabinet Decision No. 153 of 2025, introducing a significant change to the VAT treatment of metal scrap transactions within the UAE. The Decision mandates the application of the Reverse Charge Mechanism (RCM) on certain local supplies of metal scrap between VAT-registered businesses. This regulatory update is aimed [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":15794,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[125],"tags":[127,126],"class_list":["post-14273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ministerial-decisions","tag-cabinet-decision-no-153-of-2025","tag-reverse-charge-mechanism"],"_links":{"self":[{"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/posts\/14273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/comments?post=14273"}],"version-history":[{"count":3,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/posts\/14273\/revisions"}],"predecessor-version":[{"id":19955,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/posts\/14273\/revisions\/19955"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/media\/15794"}],"wp:attachment":[{"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/media?parent=14273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/categories?post=14273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mbbauditing.com\/staging\/8512\/wp-json\/wp\/v2\/tags?post=14273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}