Multi-Million Dirham in VAT and Penalties saved in a Landmark Decision
Dhruva Consultants (represented by Ujjwal Pawra and Riddhi Doshi) and Wasel & Wasel (represented by Mahmoud Abuwasel), in a joint effort, have assisted a taxpayer in a matter that resulted in getting a benefit of AED ~30mn in VAT and penalties.

In the first week of 2026, a VAT dispute that had been closely followed reached a decisive turning point. In a joint call with the leadership of the taxpayer, Dhruva and Wasel & Wasel jointly witnessed a complete cancellation of VAT and administrative penalties exceeding AED 30 million. A rare experience – and a powerful reminder of the real commercial impact that tax disputes can carry.

The Dispute Identification of the correct nature of supply – The transaction was disputed and litigated at the TDRC level

The Decision

• The TDRC examined and agreed with the taxpayer’s position
• Held no VAT was legally due (AED ~20 million)
• As no VAT applicable on the activity and administrative penalties to be reversed (AED ~8 million)

Key Takeaways
This ruling reinforces several critical principles for businesses:

• Legal characterization of a transaction is fundamental in determining VAT treatment
• VAT disputes are increasingly driven by interpretational and classification differences, rather than outright non-compliance
• Proactive assessment and timely correction of tax positions can significantly mitigate exposure

Why this ruling matters?
Experiencing a decision of this magnitude in real time – with the client – was a rare and meaningful moment. It underscored that beyond technical analysis and legal submissions, what truly matters is the certainty and relief such outcomes bring to businesses.

This matter reflects shared success along with the combined advisory and litigation capabilities of Dhruva Consultants and Wasel & Wasel, working together to navigate complex VAT issues and achieve decisive outcomes.