UAE VAT capital assets scheme calculator
Capital assets worth AED 5 million or more before VAT are monitored for 10 years (buildings) or 5 years (other assets). Each year, if the share of taxable use changes from what you recovered at purchase, you adjust: (VAT on the asset ÷ years) × (current taxable use % − original recovery %).
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
- In the capital assets scheme
- Yes
- VAT on the asset
- AED 400,000.00
- Adjustment period
- 10 years
- Adjustment this year (+ recover / − repay)
- AED -12,000.00
Report the adjustment in the first VAT return after the end of each adjustment year.
Results are estimates for general information, not tailored advice.
Annual adjustment on an AED 8m building
Input VAT of AED 400,000 fully recovered at purchase.
| Taxable use this year | Adjustment this year (+ recover / − repay) |
|---|---|
| 100% | AED 0.00 |
| 80% | AED -8,000.00 |
| 50% | AED -20,000.00 |
| 0% | AED -40,000.00 |
Each year's adjustment is one tenth of the VAT times the change in taxable use.
How the adjustment works
The scheme stops businesses recovering all the VAT on a building used for taxable purposes in year one and then switching it to exempt use, such as residential letting. Each year of the adjustment period carries an equal slice of the original VAT. If taxable use rises you recover more; if it falls you pay some back.
- Threshold: AED 5 million before VAT
- Buildings: 10-year period
- Other assets (e.g. aircraft, plant): 5-year period
Reporting
Report the adjustment in the first VAT return after each adjustment year ends and keep a register of the asset, its VAT and the yearly use percentages for the FTA.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
Frequently asked questions
What assets are in the capital assets scheme?
Assets used in the business for at least 10 years (buildings) or 5 years (others) with a value of AED 5 million or more before VAT.
What if I sell the asset during the adjustment period?
A final adjustment is made for the remaining years based on whether the sale is taxable or exempt.
VAT registration and returns
Our FTA registered accountants register you, file every return on time and fix errors before the FTA finds them, for a fixed monthly fee.