The Scrap Metal RCM Declaration: What It Must Say (with Template) | Fastlane
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The Scrap Metal RCM Declaration: What It Must Say (and Why It's Non-Negotiable)

Under the UAE's reverse charge on scrap metal, one small document decides whether the whole treatment is valid: the buyer's written declaration. Without it, there's no reverse charge — and the buyer can lose the right to recover input VAT. Here's precisely what the declaration must contain, who signs it, and a template you can adapt.

By Nithin Pathak, Fastlane Management Consultancy FTA-Registered Tax Agent Updated June 2026
⚡ Quick answer

For the reverse charge on metal scrap (Cabinet Decision No. 153 of 2025, effective 14 January 2026) to apply, the buyer must give the supplier a written declaration before the supply. It must identify the recipient (legal name + TRN) and the supplier, and confirm that: the buyer is VAT-registered and the TRN is valid at the time of supply; the goods are for resale or processing, not final consumption; the supply qualifies for reverse charge under CD 153/2025; the buyer is solely responsible for accounting for the VAT; and the buyer indemnifies the supplier for incorrect information. It's signed by an authorised signatory with designation and company stamp. No declaration = no reverse charge, and the buyer may be unable to recover input VAT. Keep it with the invoice for 5 years.

The reverse charge on scrap metal sounds like it's about invoices — supplier leaves the VAT off, buyer accounts for it. But the document that actually switches the mechanism on isn't the invoice. It's a short letter from the buyer to the supplier: the RCM declaration. Skip it, and the FTA's position is simple — the reverse charge never applied, and the consequences land on both parties.

It's one page, but every line earns its place. Here's how to get it right.

Why it exists

The declaration is the trigger, not the paperwork

The reverse charge moves the VAT-accounting duty from supplier to buyer — a meaningful shift, so the rules require proof, in advance, that the buyer is the right kind of recipient: VAT-registered, and buying to resell or process rather than to consume. The declaration is that proof. The supplier must obtain and retain it, verify the buyer's FTA registration, and only then issue the invoice stating reverse charge applies.

Think of the declaration as the key. The invoice is just the door. Without the key, the door doesn't open — no matter what the invoice says.
The six points

What the declaration must contain

A complete scrap-metal RCM declaration covers six confirmations, plus the parties' details:

  1. VAT registration — valid at the time of supply

    The buyer confirms it's registered for VAT under Federal Decree-Law No. 8 of 2017 and that its TRN is valid at the time of supply (and states the TRN).

  2. Goods are for resale or processing

    The buyer confirms the scrap is purchased for resale or processing — the core eligibility test for the mechanism.

  3. Not for final consumption

    The goods are acquired for resale and/or further processing, not final consumption — making the distinction explicit.

  4. The supply qualifies for RCM

    An explicit statement that the supply qualifies for the reverse charge mechanism under Cabinet Decision No. 153 of 2025.

  5. Buyer is solely responsible for the VAT

    The buyer accepts it is solely responsible for accounting for VAT under reverse charge — the substance of the whole shift.

  6. Indemnity to the supplier

    The buyer agrees to indemnify the supplier against any VAT, penalties or interest arising from incorrect information in the declaration — protecting the seller who relied on it.

It then closes with the authorised signatory's name, designation, signature and the company stamp, and is issued "for VAT compliance and audit purposes."

Use it

An illustrative declaration template

Here's a generic version you can adapt to your own letterhead. Replace the bracketed fields — and have your tax advisor confirm it fits your situation before you rely on it.

Declaration — Reverse Charge Mechanism (Metal Scrap) illustrative template

[Recipient/Buyer legal name] · Recipient TRN: [TRN] · Date: [date]

To: [Supplier legal name] · TRN: [supplier TRN] · Address: [supplier address]

Subject: Declaration for Application of Reverse Charge Mechanism (RCM) on Supply of Metal Scrap pursuant to Cabinet Decision No. 153 of 2025

We, [Recipient legal name], a legal entity incorporated and operating in the UAE, hereby declare, confirm and undertake the following for UAE VAT compliance:

  1. We are registered for VAT in the UAE under Federal Decree-Law No. 8 of 2017, and our TRN [TRN] is valid at the time of supply.
  2. The goods are purchased for the purposes of resale or processing.
  3. The goods are acquired for resale and/or further processing, and not for final consumption.
  4. The supply qualifies for the Reverse Charge Mechanism under Cabinet Decision No. 153 of 2025.
  5. We shall be solely responsible for accounting for VAT under the Reverse Charge Mechanism.
  6. We agree to indemnify the supplier against any VAT, penalties or interest arising from incorrect information provided herein.

This declaration is issued for VAT compliance and audit purposes. For and on behalf of the Recipient/Buyer:

Authorised Signatory: ______________________
Designation: ________________
Signature: ________________  ·  Company Stamp: ________

Illustrative wording only — adapt to your business and verify with a tax advisor. Not a substitute for legal advice.

Two-sided duty

What each party must do with it

If you're the buyer (recipient)

Issue the declaration before the supply, signed and stamped. Keep a copy with each related purchase invoice. Your right to treat the purchase under reverse charge — and to recover input VAT — rests on it.

If you're the supplier (seller)

Obtain and retain the buyer's declaration, verify their TRN is valid with the FTA, and only then issue the invoice without VAT, stating reverse charge applies. The declaration is your evidence for why you didn't charge VAT.

✗ No declaration before supply — the cost

If the declaration isn't in place before the supply, the reverse charge doesn't apply to that transaction, the buyer may be unable to recover input VAT on the scrap, and the supplier is left exposed for not charging VAT. A missing one-page letter can unravel the VAT treatment of an entire load.

⚠️ Keep it on file for 5 years

The declaration is part of your VAT records. Retain it alongside the invoice for at least 5 years in case of an FTA review. Note that from 1 January 2026 a separate self-invoice is no longer required for reverse-charge supplies — but the declaration and supplier invoice must be kept.

Sources & authority: Reverse charge on local metal-scrap supplies between VAT-registered persons under Cabinet Decision No. 153 of 2025, effective 14 January 2026 (Federal Decree-Law No. 8 of 2017 on VAT; Cabinet Decision No. 52 of 2017). The recipient must provide a written declaration before the date of supply confirming VAT registration and resale/processing intent; the supplier must obtain and retain it, verify the recipient's registration, and state on the invoice that reverse charge applies. Without the declaration, RCM does not apply and input VAT recovery may be denied. Self-invoicing for RCM removed from 1 January 2026 (Federal Decree-Law No. 16 of 2025); 5-year record retention. General information current at June 2026; conditions can change and depend on your facts — confirm with the FTA or a registered tax agent.

Get your reverse-charge paperwork bulletproof

As an FTA-registered tax agent, Fastlane sets up your RCM declarations, supplier-side verification and invoice wording, and maps the entries correctly in your VAT return — so your scrap trades hold up under audit. VAT filing from AED 199.

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FAQ

Frequently asked questions

What is the scrap metal RCM declaration?
A written declaration the buyer gives the supplier before the supply, confirming the buyer is VAT-registered and the goods are for resale or processing. It's required for the reverse charge to apply to local scrap-metal supplies under Cabinet Decision No. 153 of 2025.
What must the declaration contain?
The recipient's legal name and TRN and the supplier's details, plus confirmations that the buyer is VAT-registered (valid at supply), the goods are for resale/processing not final consumption, the supply qualifies for RCM under CD 153/2025, the buyer is solely responsible for accounting for VAT, and the buyer indemnifies the supplier. It's signed by an authorised signatory and stamped.
What happens without a declaration?
Reverse charge doesn't apply to that supply, the buyer may be unable to recover input VAT, and the supplier is exposed for not charging VAT. It must be in place before the supply.
Who signs it and how long do we keep it?
An authorised signatory of the buyer, with name, designation, signature and company stamp. Keep it with the invoice as part of your VAT records, generally for five years.
Do we still need a self-invoice as well?
No — from 1 January 2026, self-invoicing for reverse-charge supplies is no longer required. Retain the supplier invoice and the declaration instead.
NP
Nithin Pathak
Founder & Managing Partner — Fastlane Management Consultancy · FTA-Registered Tax Agent

Fastlane Management Consultancy sets up reverse-charge declarations, supplier verification and VAT-return mapping for UAE traders — so in-scope supplies like metal scrap are compliant and input VAT is protected.

This article is for general information only and does not constitute tax or legal advice. The template is illustrative and must be adapted to your circumstances; reverse-charge conditions are strict and misapplication can affect input VAT recovery and lead to penalties. Rules can change — confirm your position with the FTA or a registered tax agent before relying on this. For VAT and reverse-charge support, contact Fastlane Consultancy.

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