Blog

UAE Guide: What is VAT Reverse Charge Mechanism in Dubai?

VAT in UAE
UAE VAT Reverse Charge Mechanism

Reverse Charge Mechanism in Dubai, UAE is a mechanism under which the recipient of goods or services is required to pay VAT instead of the supplier. It is applied as per Article 48 of Federal decree-law no. (8) Of 2017 on value added tax.

It applies to the following:
1. If the Taxable Person imports Concerned Goods or Concerned Services for the purposes of his Business, then he shall be treated as making a Taxable Supply to himself, and shall be responsible for all applicable Tax obligations and accounting for Due Tax in respect of these supplies with an exception specified by the Executive Regulation of this Decree-Law.

2. If a Registrant makes a Taxable Supply in the State to another Registrant of any crude or refined oil, unprocessed or processed natural gas, or any hydrocarbons, and the Recipient of these Goods intends to either resell the purchased Goods as crude or refined oil, unprocessed or processed natural gas, or any hydrocarbons, or use these Goods to produce or distribute any form of energy, the following rules shall apply:
a) The Registrant making the Supply shall not charge Tax on the value of the supply of the Registrant making the Supply shall not charge Tax on the value of the supply of the Goods referred to in this paragraph.
b) The Recipient of the Goods shall calculate the Tax on the value of the Goods supplied there to and shall be responsible for all applicable Tax obligations and for calculating the Due Tax in respect of such supplies.

3. If the supplier mentioned above is not aware that the Recipient of Goods was not registered at the Date of Supply, the supplier and the Recipient of Goods shall be jointly and severely liable for any Due Tax and relevant penalties in respect of the supply.

Reverse charge under VAT law in Dubai is applicable to (1) in above except when final destination of imported goods is another Implementing State. It is also applicable to (2) in above except when supply is taxable at 0%, supply of goods or services other than the goods in (2) above, no written confirmation by recipient for resale and no written confirmation by recipient that he is registrant.

For more information on this topic, please visit our Insights Section or Contact Us

For enquiries Phone (UAE): +971 567952590

Related Articles:

1.     Top FTA VAT Return Filing Services in Dubai Abu Dhabi UAE

2.     List of VAT Consultants in Dubai, UAE

3.     When will UAE implement Corporate Tax?

4.     UAE Guide: VAT Return Filing Services in Dubai, Abu Dhabi, UAE

5.     UAE Guide: VAT Fines Services in Dubai, Abu Dhabi, UAE

6.     UAE Guide: How to Appeal Vat Penalties in Dubai, Abu Dhabi, and UAE?

7.     UAE Guide: VAT Consultant in Abu Dhabi

8.     UAE Guide: Top VAT Consultant in Dubai (2023)

9.    UAE Guide: Role, Responsibilities, Eligibility and Skills of VAT Consultant

10.  UAE Guide: Which Documents are Required to Register for VAT Return?

11.  UAE Guide: VAT Registration

12.  UAE Guide: Implications of VAT

13.  UAE Guide: An Introduction to VAT

14.  UAE Guide: VAT Return Form 201- Everything you must know

15.  UAE Guide: Why do we Need A VAT Consultant in the Dubai?

16.  UAE Guide: What is the Need to Approach an Experienced Business Setup and VAT Consultant in Dubai?

17.  UAE Guide: What are the Advantages of Hiring a VAT consultant in Dubai Abu Dhabi?

18.  UAE Guide: VAT Penalties in Dubai

19.  UAE Guide: What is Article wise analysis of VAT Law for Dubai and Abu Dhabi?

20.  UAE Guide: What is VAT Audit in Dubai?

21.  UAE Guide: Dubai VAT an Aid to Business Growth

22.  UAE Guide: Why is Input VAT Non-recoverable on Entertainment Services in Dubai?

23.  UAE Guide: What are ways to avoid Penalties in Dubai VAT Law?

24.  UAE Guide: What is VAT on reimbursement and disbursement of expenses in Dubai?

25.  UAE Guide: What is VAT on compensation Payments in Dubai and Abu Dhabi?

26.  UAE Guide: What is VAT on digital Marketing Services in Dubai?

27.  UAE Guide: What is VAT on transportation in Dubai and Abu Dhabi?

28.  UAE Guide: How to apply for Excise Tax De-Registration in Dubai?

29.  UAE Guide: What is VAT on Options in Dubai and Abu Dhabi?

UAE Guide: What are VAT Groups in Dubai?

VAT Penalties in Dubai
Dubai VAT: AN Aid to Business Growth
How does VAT Regime work in Dubai?
What is Exports and Imports under VAT in Dubai?
How to Amend VAT Details in Dubai and Abu Dhabi?