On 8 July 2026, the Federal Tax Authority issued the Directive on Tax Transactions No. 1 of 2026, settling a question that has quietly divided the UAE’s expert-witness community — and one that uae vat consultants field regularly — since 2018: are the services of a court-appointed judicial expert subject to VAT? Many experts — engineers, accountants, valuers, medical practitioners appointed from the Ministry of Justice roster — have treated court appointments as a statutory duty performed under judicial direction, outside the scope of VAT altogether. The Directive rejects that position comprehensively: expert services are supplied in the course of a Business in the UAE and constitute Taxable Supplies, whoever pays for them.

Who is a “Judicial Expert”

The Directive applies to a natural or legal person registered in the Roster of Experts with the Ministry of Justice, a local judicial authority, or arbitration centres, who is appointed by the competent court to provide expert services. Three features of that definition deserve attention:

• It captures individuals and firms alike — the sole-practitioner engineer on the MOJ roster and the audit firm appointed as accounting expert are both within scope.
• The inclusion of arbitration centre rosters extends the position beyond court litigation into arbitral proceedings — significant given the volume of expert work flowing through the UAE’s arbitral institutions.
• The reference framework is Federal Decree-Law No. 21 of 2022 regulating the profession of experts before judicial authorities — the same registration regime that governs who may act as an expert now anchors who is caught for VAT.

What the Directive decides

Clause 1 — expert services are Taxable Supplies. Services provided pursuant to a court appointment are regarded as supplied in the course of a Business in the UAE and constitute Taxable Supplies under Articles 1 and 2 of the VAT Law. This is the doctrinal heart of the Directive. The counter-argument — that a court-appointed expert acts under compulsion of judicial order rather than in an independent economic activity — is foreclosed. The breadth of the VAT Law’s definition of “Business” (any activity conducted regularly, on an ongoing basis, and independently) comfortably accommodates roster experts, who accept registration voluntarily, act independently of the court in forming their opinions, and are remunerated for doing so.

Clause 2 — every amount received is Consideration. Any amount the expert receives for expert services is Consideration for a supply of services. The phrasing is deliberately wide: court-fixed fees, deposits released from the court treasury, supplementary fees for additional assignments, and reimbursed amounts all fall within it.

Clause 3 — full compliance, including registration. The expert must comply with all tax obligations, including VAT registration where the Article 13 thresholds are met (mandatory registration at AED 375,000 of taxable supplies in the trailing twelve months or expected next thirty days; voluntary registration available at AED 187,500) — the same thresholds that apply across vat services in UAE generally. For individual experts, the aggregation point is critical: expert fees are added to all other taxable supplies the person makes — consultancy income, rental of commercial property, any other independent activity — in testing the threshold. An engineer whose private consultancy generates AED 300,000 and whose expert appointments generate AED 100,000 is over the mandatory threshold even though neither stream alone crosses it.

Clause 4 — government payers change nothing. Receipt of consideration from a Government Entity — the court treasury, a ministry, the public prosecution — does not affect the tax treatment. Experts cannot treat government-sourced fees as outside the scope merely because of the payer’s identity.

Worked example

Facts. Eng. Khalid, a structural engineer employed full-time by a Dubai consultancy, is registered on the Ministry of Justice roster. During the twelve months to 30 June 2026 he completes court-appointed expert assignments generating fees of AED 390,000, deposited by the litigating parties with the court and released to him on completion of each report. He has no other independent income and has never registered for VAT.

Registration. His employment salary is outside the scope of VAT (an employee is not conducting business), but his expert fees are taxable supplies in their own right. At AED 390,000 in the trailing twelve months he has exceeded the mandatory registration threshold and must apply for registration within the statutory timeframe — a step best planned with a vat consultant in Dubai given the aggregation and back-dating complexity — late registration carries an administrative penalty of AED 10,000, and output VAT is due on supplies made from the date registration should have taken effect.

The court-fixed fee problem. Khalid’s next appointment fixes his fee by court order at AED 100,000. Unless the order or the fee arrangement permits VAT to be added, Article 38 of the VAT Law deems the consideration inclusive of VAT:

AED 100,000 × 5/105 = AED 4,761.90 output VAT  |  value of supply AED 95,238.10

Khalid remits that VAT from his own pocket — an effective 4.76% haircut on every court-fixed fee. Experts should now address VAT explicitly when fees are proposed to the court, seeking orders expressed as “plus VAT where applicable”; where that is not achievable, the inclusive treatment applies and the fee should be priced accordingly.

Invoicing. As a registrant, Khalid must issue tax invoices for his fees. Where the recipient of the supply is a VAT-registered litigant (for example, a corporate party that deposited the expert fee), that party may be entitled to input tax recovery — making the identification of the true recipient of the supply commercially relevant to both sides.

Gray areas that remain

Retrospective exposure. Directives issued under FTA Decision No. 5 of 2021 interpret the law; they do not amend it. The FTA’s position is therefore that expert services have always been taxable — the Directive confirms rather than creates the treatment. Experts who exceeded the mandatory threshold in earlier years face historical exposure: late registration, output VAT on past fees, and potential voluntary disclosure decisions. How assertively the FTA will pursue back-years for newly-registering experts remains to be seen, but the safest course is a quantified assessment of historic fee income before approaching registration, so the disclosure strategy is chosen rather than improvised.

Who is the recipient of the supply? The Directive confirms that there is a supply for consideration, but not to whom. Expert fees are typically deposited by one or both litigants with the court, which releases them to the expert. Whether the supply runs to the litigant(s), and in what proportions where costs are shared or shifted by judgment, determines who receives the tax invoice and who can recover input VAT. This matters most for corporate litigation, where fee amounts are substantial and recovery is valuable. A public clarification on invoicing mechanics in the deposit-and-release model would be welcome.

Tribunal-appointed and party-appointed experts. The Directive addresses experts appointed by the competent court from official rosters. Party-appointed experts in litigation and experts appointed directly by arbitral tribunals were, in most cases, never in doubt — they contract privately and their services have always been taxable consultancy. The Directive’s significance is precisely that it brings the court-appointed population, which believed itself different, to the same position.

What judicial experts should do now

Every roster-registered expert — individual or firm — should quantify expert fee income (together with all other independent income) against the registration thresholds for the current and prior periods; register where required, and take advice on the treatment of historical periods before filing; restructure fee proposals to courts and arbitration centres to address VAT explicitly; implement tax invoicing aligned to the deposit-and-release payment flow; and, for firms already registered, confirm that court-appointed work is being coded as taxable supplies rather than out-of-scope receipts.

How TSAC can help

TSAC provides vat consultancy services in Dubai for professionals and firms on VAT registration, historic exposure quantification, voluntary disclosures, and invoicing design — and our team’s own expert-witness and valuation practice gives us first-hand familiarity with court fee mechanics. If you hold a roster registration and have been treating expert fees as outside the scope of VAT, the time to regularise the position is before the FTA raises it with you.

This publication is for general information only and does not constitute tax advice. The Arabic text of the Directive prevails over the English translation. Please contact TSAC for advice specific to your circumstances.