Important Notice: FTA Foreign Exchange Rate Policy Effective From 17th May 2018
As an important update to the FOREX requirements in the Executive Regulations, The Central Bank of the UAE has now begun to publish daily exchange rates on its website for certain currencies against the UAE Dirham to be used for VAT purposes.
The rates, which are updated Monday to Friday, are based on FX rates prevailing at 6pm UAE time each day. Where specific markets are closed due to a local holiday, then the rate used will be the prevailing rate of the previous day at 6pm.
Historical rates are also available on the Central Bank website.
Article 69 of Federal Decree-Law No. (8) of 2017 states that where a supply is in a currency other than AED, the amount stated on the tax invoice shall be converted to AED using an exchange rate approved by the Central Bank at the date of supply. As such all businesses should now take action to ensure that they comply with the Central Bank exchange rates with immediate effect.
Accordingly, in order to comply fully with the VAT Regulations, you must adopt the use of these rates in your FOREX transactions for VAT purposes. We suggest the daily rates are used for all goods/services imported or exported to reconcile with the FTA/Customs portal assessment of VAT.