The UAE has not published any specific guidance on the VAT position of holding companies. However, by issuing its Public Clarification on the VAT Treatment of Bank Interest and Dividends and its guidance on Input Tax Apportionment and Financial Services, holding companies should clearly carefully consider their VAT recovery position.

Holding companies that are part of a cross-border structure may incur a significant amount of input tax (including reverse charge VAT) on cross-border management fees and cost recharges. When the holding company is receiving dividends, providing loans, trading in debt and equity securities, and/or providing management services, it is likely regarded as a partial exempt supplier which is restricted to recover a portion of its input tax. If the standard method does not lead to a fair and reasonable VAT recovery position, the holding company is required to determine its recovery position on the basis of actual use.