When it comes to VAT in the UAE, taxable businesses need to accurately determine the place of supply of goods or services. The place of supply determines whether the supply is made in the UAE or outside the UAE for VAT purposes. The determination of the place of supply for VAT purposes gives information as to which state is entitled to collect the tax in respect of the taxable supply produced by the taxable person on the date of supply.
Determination of the place of supply can be tough for business owners as the place of supply is determined differently for goods and services. However, this can be solved by consulting with the top VAT consultants in Dubai. Keep reading to know more about determining the place of supply under VAT in the UAE:
Determining the Place of Supply of Goods
As per the UAE VAT Law, the place of supply of Goods will be in the UAE if the supply was made in the UAE, and does not include Export from or Import into the UAE. The place of supply of installed or assembled Goods if exported from or imported into the UAE will be:
- In the UAE if assembly or installation of the Goods was done in the UAE.
- Outside the UAE if assembly or installation of the Goods was done outside the UAE
Place of Supply of Goods that Includes Export or Import
The place of supply of goods including export or import will be,
A). Inside the state in the following circumstances:
- The supply includes exporting to a place outside the Implementing States
- The recipient of Goods in an Implementing State is not registered for Tax in the state of destination, and the total exports from the same supplier to this state do not exceed the mandatory registration threshold for the said state.
- The Recipient of Goods does not have a Tax Registration Number (TRN) in the State, and the total exports from the same supplier in an Implementing State to the State exceed the Mandatory Registration Threshold
B). Outside the State in the following circumstances
- The supply includes export to a person who is a tax registrant in one of the Implementing States
- The Recipient of Goods is not a tax registrant in the Implementing State to which the export is made and the total exports from the same supplier to this Implementing State exceeds the mandatory registration threshold for the said state
- The Recipient of Goods does not have a TRN and the Goods are imported from a supplier registered for Tax in any of the Implementing States from which the import is made, and the total imports from the same supplier to the State do not exceed the Mandatory Registration Threshold
Determining the Place of Supply of Services
The place of supply of Services will be the Place of Residence of the Supplier. VAT consultants in Dubai can help you accurately determine the place of supply of services.
Place of Supply in Special Cases
A different treatment needs to be applied while determining the place of supply in special cases such as the following:
- The place of supply will be the Place of Residence of the Recipient of Services if the recipient of services has a place of residence in another Implementing State and is a tax registrant in that State
- The place of supply will be the UAE if the recipient of Services is in Business and has a Place of Residence in the UAE, and the Supplier does not have a Place of Residence in the UAE
- The place of supply will be the place where the services were performed in case of services related to goods (e.g.: the installation of goods supplied by others)
- For the supply of means of transport to a lessee who is not a taxable person in the UAE without a TRN in the Implementing State, the place of supply will be where such means of transport were placed at the disposal of the lessee
- For the Supply of restaurant, hotel, and food and drink catering Services, the place of supply will be the place where the services are actually rendered
- For the Supply of any cultural, artistic, sporting, educational or similar services, the place of supply will be the place in which the Services were carried out
- For the Supply of Services related to real estate, the place of supply will be the location of the real estate
- For the Supply of Transportation Services, the place of supply will be the place from which the transportation starts
Place of Supply of Water and Energy
The following conditions apply while determining the place of supply of Water and Energy:
- The supply of water and all forms of energy through a distribution system will be considered as performed in the Place of Residence of the Taxable Trader if the goods have been distributed by a Taxable Person with a Place of Residence in the UAE to a Taxable Trader having a Place of Residence in an Implementing State
- The supply of water and all forms of energy through a distribution system will be considered to have occurred at the place of actual consumption if distributed by a Taxable Person to a Non-Taxable Person
Place of Supply of Telecommunication and Electronic Services
For telecommunications and electronic Services, the place of supply will be in the UAE, to the extent of the use and enjoyment of the supply in the UAE. However, the place of supply will be outside the UAE to the extent of the use and enjoyment of the supply outside the UAE. The actual use and enjoyment of all telecommunications and electronic Services will be where these Services were used regardless of the place of contract or payment. Consult with tax agents in Dubai for more information.
VAT Consultants in Dubai Can Help You Determine the Place of Supply
Accurately determining the place of supply is critical to ensure seamless VAT compliance in the UAE. VAT consultants in Dubai such as Jitendra Chartered Accountants (JCA) can help you accurately determine the Place of Supply and resolve other tax-related issues. JCA is one of the leading providers of VAT consulting services in Dubai with more than 21 years of experience. The tax professionals at JCA are highly qualified to provide top-class tax consulting services in Dubai. Being one of the top FTA-approved tax agents in Dubai, we can make your tax compliance strategy flawless.