This Public Clarification, VATP014, addresses the UAE VAT treatment of financial options and their associated premiums. It confirms that the supply of options concerning debt and equity securities is exempt from VAT. This interpretation is based on Article 42 of Cabinet Decision No. 52 of 2017, where the definitions of 'debt security' and 'equity security' explicitly include options to acquire such instruments. Consequently, these transactions fall under the exemption in Article 42(3). However, options on other underlying assets, like commodities, remain taxable. The document also provides guidance on correcting past incorrect tax treatments.