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Understanding UAE VAT Reverse Charge Mechanism

Understanding UAE VAT Reverse Charge Mechanism

The UAE VAT Law will be introduced and implemented across UAE on 01st January 2018 at a flat rate of 5%. Let us understand UAE VAT Reverse Charge Mechanism.

Usually, the VAT liability is to be discharged by the supplier of goods/ service or both.

However, in specific cases, the liability to pay tax is applicable on the recipient of the supply instead of the supplier. This is known as UAE VAT Reverse Charge Mechanism (RCM).

According to Article 48 of VAT Law, in cases where 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. He shall be responsible for all applicable taxes.

The Executive Regulation shall specify conditions and instances where UAE VAT Reverse Charge Mechanism applies and additional obligations related to record keeping for tax calculated according to the RCM.

UAE VAT Reverse Charge Mechanism

Article – 48: UAE VAT Reverse Charge Mechanism

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 be accounting for Due Tax in respect of these supplies.

2. As an exception to Clause (1) of this Article, in case the final destination of the Goods when entering the State is another Implementing State, the Taxable Person shall pay the Due Tax on Import of Concerned Goods pursuant to the mechanism specified by the Executive Regulation of this Decree-Law.

3. 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 Goods referred to in this paragraph.

b. The Recipient of the Goods shall calculate the Tax on the value of the Goods supplied thereto and shall be responsible for all applicable Tax obligations and for calculating the Due Tax in respect of such supplies.

4. The provisions of Clause (3) of this Article shall not apply in any of the following situations:

a. Where, before the Date of Supply, the Recipient of Goods has not provided a written confirmation to the supplier that his acquisition of the Goods is for the purpose of resale.

b. Where, before the Date of Supply, the Recipient of Goods has not provided a written confirmation to the supplier that he is a Registrant and the supplier has not verified the Tax Registration of the Recipient of Goods by means approved by the Authority.

c. Where the Taxable Supply would be subject to Tax at the rate of 0% in accordance with Clause (1) of Article (45) of this Decree-Law.

d. Where the Taxable Supply includes a supply of Goods or Services other than the Goods referred to in Clause (3) of this Article.

5. Where a Recipient of Goods of any crude or refined oil, unprocessed or processed natural gas, or any hydrocarbons confirms in writing to the supplier that he is a Registrant for the purposes of applying Clause (3) of this Article, the following shall apply:

a. The supplier shall not be liable for calculating the Tax in relation to the supply unless he was aware or supposed to be aware, that the Recipient was not a Registrant at the Date of Supply.

b. The Recipient shall be liable for the calculation of any Due Tax in respect of the supply.

6. If the supplier mentioned in paragraph (a) of Clause (5) of this Article is supposed to be 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.

7. The Executive Regulation of this Decree-Law shall specify:

a. Conditions and instances where the mechanism in Clause (1) of this Article applies.

b. Additional obligations related to record keeping for Tax calculated according to the mechanism in Clause (1) of this Article.

To know more about the VAT you can visit the official website of Ministry of Finance – UAE www.mof.gov.ae

You can download other accounting templates like UAE VAT Invoice Template, UAE Invoice Template in Arabic, and Cash Book with VAT from here.

We thank our readers for liking, sharing and following us on different social media platforms.

If you have any queries please share in the comment section below. We will be more than happy to assist you.

Filed Under: UAE VAT

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About Fahim Lashkaria

I love working in Excel and I share functional excel templates at ExcelDataPro. Read more about me here or interact with me on twitter.

Comments

  1. Melvin says

    December 7, 2017 at 8:29 am

    So Companies in designated zone(Outside of state-As per Article 51 of Exec. Regultion no 52) , will not be issuing Tax invoice/Collect Tax for FTA from buyer in UAE, as this transaction will be treated as reverseCharge mechanism(Article 48 of Ref 1)?

    Reply
    • Fahim Lashkaria says

      December 8, 2017 at 11:46 am

      The applicability of VAT depends on nature of the transactions.
      If sold high seas and customer releases goods from customs then no need of tax invoice as it is outside UAE. But if you release the goods from customs and then provide to the customer then, in that case, you will first pay vat to govt and also claim input of the same. You will issue a tax invoice in this scenario.

      Reply
  2. Khaled Al Saadi says

    December 16, 2017 at 5:41 pm

    Kindly,
    Can you clear the Reverse Charge Mechanism with an example and accounting journal entries?

    Thanks.

    Reply
    • Fahim Lashkaria says

      December 18, 2017 at 9:56 am

      The registered dealer has to account VAT on import purchase and can claim input later. This reversal of tax liability from the seller to buyer is called Reverse Charge Mechanism.

      Suggested Accounting Entries:

      Debit: Direct cost of the original purchase amount
      Debit: A special account for the reverse charge in the tax ledger under the Input tax.
      Credit: Supplier for Amount of Import Purchase
      Credit: An additional special account under input VAT

      These accounting entries are in respect to my knowledge and understanding. You can consult local tax consultants for further clarifications.

      Reply
      • PRAGNESH says

        January 7, 2018 at 9:14 am

        Can you provide an example for above journal entry?

        Reply
        • Fahim Lashkaria says

          January 8, 2018 at 4:45 am

          Debit: Direct cost of the original amount let’s say 10000 AED
          Debit: a special account for the reverse charge in the tax ledger under the Input tax. 500 AED
          Credit: Supplier for 10000 AED
          Credit: an additional special account under input VAT for 500 AED

          Reply
          • AHMED says

            March 6, 2018 at 10:01 am

            Debit: a special account for the reverse charge in the tax ledger under the Input tax
            for INPUT TAX RCM in which account but in chart of account
            as liability or as expenses

          • Fahim Lashkaria says

            March 8, 2018 at 7:29 am

            Tax paid under Reverse charge is a liability. Input tax RCM to be claimed on RCM will be adjusted against your Output tax. This is what I could understand. If further query you can contact any local tax consultant.

  3. Bala says

    February 14, 2018 at 12:41 pm

    Nice explanation. Will the supplier from free trade zone supplying to inland customer be treated same as foreign supplier?

    Reply
    • Fahim Lashkaria says

      February 14, 2018 at 2:03 pm

      yes.

      Reply
  4. syed says

    March 25, 2018 at 11:35 am

    dear sir ,
    good day !

    my company in jabel ali imported goods now reverse charge will not apply and vat will be 0 % , while filling vat return there are 2 options std rated exp and supplies subject to reverse charge , but there is no option for zero rated purchase kindly help me in this regard

    Reply
    • Fahim Lashkaria says

      March 29, 2018 at 8:42 am

      Looking into your matter will soon get back to you on this.

      Reply
  5. mary jane says

    April 2, 2018 at 5:51 am

    Good morning,
    paano po mag apply ng e-dirham cards at paano ito gamiting para sa pagbabayad ng vat
    thanks po

    Reply
    • Fahim Lashkaria says

      April 2, 2018 at 8:41 am

      Mag-click sa link upang malaman ang pamamaraan para sa e-dirham card

      https://www.mof.gov.ae/en/mservices/Pages/EdirhamProcedures.aspx

      Reply
  6. Shammaz says

    April 24, 2018 at 6:57 am

    for expenses paid locally as gifts or charities aed 1000 how i have show tax?
    journal entry for that?

    Reply
  7. Shahanas says

    May 8, 2018 at 7:50 am

    Do we need to pay tax for the imported items of the same tax period even if did not sell the imported items?

    Reply
    • Fahim Lashkaria says

      May 8, 2018 at 11:46 am

      yes. VAT through RCM is to be paid on Imported Goods at the time of import.

      Reply
  8. zaid Abbas dalvi says

    June 10, 2018 at 11:47 am

    if the other country has no vat and customs charge vat to uae supplier what will be journal entries with example

    Reply
    • Fahim Lashkaria says

      June 11, 2018 at 9:59 am

      Couldn’t understand your query dear. Please elaborate your query to make a valid question. Thanks

      Reply
  9. May Anne says

    June 12, 2018 at 9:17 am

    Hi Sir,

    Kindly explain if we will gonna charge 5% VAT to the customer within the state but the goods are imported from Germany to customer which is our main branch. In this case we are just the one who issued invoice to them but the goods are from Germany then deliver directly to the supplier? Is it applicable to reverse charge mechanism to our customer?

    Reply
    • May Anne says

      June 12, 2018 at 9:19 am

      *deliver directly to the customer i mean

      Reply
    • Fahim Lashkaria says

      June 12, 2018 at 11:08 am

      There can be 2 scenarios in this:
      1. The client ordered and he is going to pay the RCM.
      2. The client ordered but you will pay RCM and issue a local invoice with to him.

      In the first case, the client will directly pay to govt. Whereas in the second case, you will pay against RCM and then collect VAT from the client.

      Reply
  10. salman says

    June 20, 2018 at 7:06 pm

    Sir,

    1) my company is is designated zone,
    2) it have import from oman, and export to african countries.
    3) it have local sales
    4) it have local taxable purchases

    so my doubt is

    1. since 95% of my sale is export from designated zone to outside uae (is it out of scope/zero rated??,

    2. if it out of scope can i claim input tax refund??

    3. if im selling to unregistered customers in mainland (im releasing goods from customs to mainland using my import code and TRN) should i pay VAT as reverse charge?? can i issue and take 5% vat from my customer ??

    thanking you in advance

    Reply
    • Fahim Lashkaria says

      June 21, 2018 at 9:11 am

      Dear Salman. Let me first explain the concept of Input to you. If you have paid any VAT on your purchase then you are eligible for the claim.
      In your case;
      1. When your sales and purchase are outside UAE and other places no need to account for VAT. Additionally, you cannot claim input as the transactions are out of scope. But selling goods from the mainland to other countries (export) will be zero-rated.
      2. But if you have local taxable purchases with VAT and sales with VAT then you are eligible to claim.
      3. Yes, if you have already paid VAT at the import then you can claim VAT from your customers by issuing them a tax invoice. This transaction for you and your customers will be a mainland transaction.

      Reply
      • zamir kazi says

        April 17, 2019 at 5:22 pm

        I disagree, There is provision in law to take input tax credit against out of scope supply

        Reply
        • Fahim Lashkaria says

          April 24, 2019 at 5:57 pm

          What do you disagree? Please provide the reference to support it. If it is available in the law then I will be able to understand and change if necessary.

          Reply
  11. Manish says

    June 26, 2018 at 9:17 am

    Dear Sir
    My Company in Designated Zone ,please answer my following Queries at earliest.
    1) we purchase from mainland and sell in Designated Zone and export the goods
    q) can we need to show designated zone sale and export sales in vat return ?
    b) If we need to show in vat return than its come under 0 rated ??
    c) if its out of scope than i am able to claim vat input on my purchase ??

    2) we import the goods from USA than where purchase need to show in vat return

    Reply
    • Fahim Lashkaria says

      June 26, 2018 at 1:41 pm

      Dear Manish,
      1. a) You purchase from the mainland by paying VAT then it is your input.
      b) Sale from the designated zone is out of scope.
      c) Please read the below article for better understanding of VAT Return and which details to furnish wherein the vat return.

      https://exceldatapro.com/uae-vat-return-format/

      Reply
  12. Abdul Majeed says

    June 30, 2018 at 8:24 am

    Dear sir
    my company (Mainland) purchased goods from freezone they give us VAT invoice. we paid this VAT amount also. This transaction we need to make RCM method or normal one. if this RCM method my doubt is we no need to pay VAT amount yes?. we need to make entries only? please help me about this transaction what i will need to do?

    Reply
    • Fahim Lashkaria says

      June 30, 2018 at 10:36 am

      When you purchase from Freezone, VAT is to be paid by the buyer under RCM. As you said your client has issued you a normal tax invoice and collected VAT from you, this transaction for you will be a normal purchase transaction. You will be eligible to claim normal input of the same in your VAT return.
      THere is a concern here which you need to clear with your supplier. If the goods are cleared by your supplier from customs by his own import code and then given to you, then the tax invoice is correct. But if the customs clearance is done by your import code then the VAT is payable by you. You can be liable for non-compliance. If there is any discrepancy either the supplier can issue a new invoice or you can call and ask FTA customer care number for clarification.

      Reply
  13. Narasimha says

    August 8, 2018 at 7:25 am

    If we arrange tour/convention/sales incentive for sales people through air or sea transport and hotel stay, events etc. outside UAE for their sales performance. In this case, the invoices from travel agents for air tickets, invoices from hotel and restaurants from other countries (UK, Europe, USA etc.) are subjected to RCM or exempted. Please clarify.

    Reply
    • Fahim Lashkaria says

      August 10, 2018 at 10:32 am

      Employee Entertainment is not eligible for Input claim. Even if the above said expenses are paid in UAE or abroad.

      Reply
  14. MSD says

    November 15, 2018 at 6:31 pm

    May I know, how would we account the expenses incurred outside UAE? As for the company I’m with now, they’re recognizing an RCM for ALL expenses and purchases incurred outside UAE regardless of whether the place of supply is outside UAE.

    Reply
    • Fahim Lashkaria says

      November 19, 2018 at 9:28 am

      According to the rule, only those transaction VAT is applicable that are done in UAE. If the services are imported then, in this case, this could be applicable. Please consult a tax expert in this regards.

      Reply
  15. Nisar says

    December 20, 2018 at 11:59 am

    For a registrant who makes supply of refined oil to a registered person for the purpose of export of oil after packing; whether reverse charge is applicable. Reverse charge applies if goods supplied to another registered person for the purpose of resale or further processing to produce nay form of energy. Is the same rule applicable if goods sold to a registered person who intends to export the goods?

    Reply
    • Fahim Lashkaria says

      December 21, 2018 at 12:24 pm

      It will be applicable only if you are exporting the goods. But if your recipient is exporting it will not be applicable to you. Your transaction will be regular.

      Reply
  16. maricel says

    January 24, 2019 at 11:49 am

    Company A (VAT registered in JAFZA customs bonded area) sold sugar to Company B (VAT registered in DMCC Freezone)
    Then, Company B sold this sugar to Company C (VAT registered in mainland).
    The sugar will be delivered directly from Company A’s custom bonded area to Company C’s location in the mainland.
    Company C, will do the customs clearance.

    1. Should Company A charge Company B 5% VAT?
    2. Should Company B charge Company C 5% VAT?
    3. While clearing the goods thru customs, will the reverse charge mechanism still applies even if Company C paid 5% VAT to Company B?

    Reply
    • Fahim Lashkaria says

      January 27, 2019 at 11:10 am

      Company A deals will Company B. Company B Sells to Company C. Both transactions are different.

      The ruling is simple. If the transaction takes place outside the mainland then no vat is applicable. But if the company C is importing goods they will pay VAT on imports.

      Reply
  17. Mujahid says

    February 21, 2019 at 4:01 pm

    HI

    My company is a real estate company, we make payments to google adv, rezora, domains purchased, airline tickets booked etc to companies outside of UAE via Credit card and also pay against services outside UAE like in UK via TT,
    1) Do these services received fall under Reverse Charge Mechanism?
    2)Hot to account for these services received in VAT Return?

    Reply
    • Fahim Lashkaria says

      February 22, 2019 at 7:33 am

      According to my understanding, these services are the import of services, this reverse charge is applicable.

      Reply
  18. Nadine says

    March 4, 2019 at 2:04 pm

    Hi, I just want to ask.

    Our VAT Certificate is just approved today(04 Mar 19), but it states that 01 Dec 2018 to 28 Feb 2019 are taxable period. But, we issued invoices for that quarter without VAT yet, considering that our VAT TRN was still under process. What should we do with these invoices? shall we charge VAT on those old invoices? the problem is those are already paid and it will be very hard to be in touch again with our customers to have them pay VAT.

    Thanks for your response.

    Reply
    • Fahim Lashkaria says

      March 8, 2019 at 10:43 am

      According to the best of my knowledge. You don’t need to include those bills as the approval date is 04 March. But to be on safer please raise the query to the VAT department.

      Reply
  19. Alex says

    March 5, 2019 at 11:52 am

    Hello!

    Our company (in mainland UAE) imports various goods from overseas, and I can see the imports on the VAT returns, prepopulated by the system. Until now, I claimed the entire input VAT (as we obtained the Bills of Entry – Customs Declarations for those imports).

    However, there will always be a timing issue and not all purchases prepopulated on the VAT return will be recorded in our systems, in time for the VAT return. Does this mean that I cannot claim the entire input VAT corresponding to those imports?

    I am also unclear on the Reverse Charge Mechanism reconciliation needed, in case of a VAT audit. Do you have any suggestions on this?

    Thank you!
    Alex

    Reply
    • Fahim Lashkaria says

      March 8, 2019 at 10:32 am

      Dear Alex,

      As per the basic understanding, once the goods are imported you are liable to pay vat on them. Whatever is imported and prepopulated on the VAT system. It means the transaction has already done. The later stage you can claim the input in current or preceding VAT returns.

      Reply
  20. Flex says

    May 26, 2019 at 10:57 am

    Hello,

    We have some expenses that are paid via credit card to Service Providers outside of UAE. As we understand, we have to pay input VAT via RCM. My question is – are we able to claim back the input VAT, as the invoices are not Tax Invoices?

    Reply
    • Fahim Lashkaria says

      May 27, 2019 at 1:53 pm

      No cannot claim.

      Reply
  21. JAVED says

    July 9, 2019 at 5:15 pm

    We have taken IT data server from UK every month expenses tax invoice mention bill receiving but vat is 0% in invoice that are paid via credit card to Service Providers. As we understand we have to pay VAT 5% by reverse charge to UAE government.

    My question can we claim the input VAT under reverse charge and Secondly how to take full entries in system.

    Please advice us.

    Reply
    • Fahim Lashkaria says

      July 10, 2019 at 11:44 am

      Yes, You can claim input. You will report the invoice in sales with RCM. The input will be adjusted against your VAT output.

      Reply
      • JAVED says

        July 10, 2019 at 12:39 pm

        “You will report the invoice in sales with RCM” Please elaborate.

        Reply
        • Fahim Lashkaria says

          July 11, 2019 at 4:31 pm

          It is self-explanatory dear. You will make an invoice of import with VAT and pay the VAT and then the same will be reported in your VAT input automatically. Further, it will be adjusted against your output.

          Reply
  22. Hasnain Raza says

    August 6, 2019 at 2:14 pm

    Hello,

    I have a question related to UAE VAT. My company is based out of the UAE. I have a customer in UAE who has placed an order with us for delivering iPhones to their office in KSA.

    I’ve bought the phones from a supplier in KSA and have the supplier deliver the items directly to the customer in KSA. The supplier has charged me 5% VAT on the items which I’ve paid him already.

    The payment is being done locally in UAE to us and we’re collecting 5% VAT from the customer here in UAE.

    Reply
    • Hasnain Raza says

      August 6, 2019 at 2:16 pm

      Can you please explain what do we need to file with FTA in UAE on this transaction?

      Reply
    • Fahim Lashkaria says

      August 6, 2019 at 3:03 pm

      Dear Hasnain, Now as I understand this scenario is that a customer came to your shop in UAE ordered for phones. The client is from KSA so you arranged the phones from your KSA supplier and sent them to your client’s place. Now there are two things to see here:
      1. If Your client who came to your shop in UAE made you the payment in UAE from his KSA account whereas you paid your supplier in KSA from your UAE bank account. This transaction is purely export. The KSA exported the goods to the UAE and you exported the goods to the KSA. You will pay 5 % VAT on imports and your client will pay 5 % on imports. This is what the bill of entry is made according to accounting.
      2. But the actual scenario is very very different. The client is from KSA so you arranged the phones from your KSA supplier and sent them to your client’s place. You paid your supplier from other Saudi client and not from your UAE bank account. In such case both the companies have made a local transaction and will record normally in your books of account.

      Reply
      • Hasnain Raza says

        August 6, 2019 at 3:19 pm

        Dear Fahim,

        No, the scenario is like this:
        1) Customer head office in UAE placed an order with us for delivering phones to his Saudi office.
        2) We got the payment from the customer locally in UAE and charged him 5% VAT.
        3) We placed the order with a supplier in KSA and paid the supplier from UAE. The supplier charged us 5% VAT.
        4) The Supplier in KSA delivered the items to the customer’s KSA office directly.

        Reply
        • Fahim Lashkaria says

          August 6, 2019 at 3:28 pm

          Your order placed in UAE and paid in UAE so it is a local transaction.
          You supplier issued a bill in your name and payment received from another GCC country account. SO it is purely export. You will report this transaction in your imports and pay vat as well as get input credit.

          Read this article for more details.
          https://exceldatapro.com/intra-gcc-transactions/

          Reply
          • Hasnain Raza says

            August 6, 2019 at 3:57 pm

            Dear Fahim,

            Thanks for your response.
            1) You mean I will report this transaction in my exports (not imports. Right? since the place of supply is KSA)?
            2) So what you’re saying is that I will file VAT as the difference in VAT received in UAE and VAT paid to KSA supplier? Do you have any official clause that I can refer that endorses your feedback, please?

          • Fahim Lashkaria says

            August 6, 2019 at 4:06 pm

            You said that your client’s head office is in UAE and they ordered and paid you. So, logically if the payment amount came from a UAE account you will issue the invoice to the UAE company (as mentioned by you that the client has his head office in UAE). It is your local transaction.

            If you have issued the bill to KSA then firstly the payment should come from KSA company account to make it an export transaction. It will contradict with your accounting as you are paid from a UAE based account. how will you justify this when FTA raises a concern. This is best from my knowledge. For better clarification, you can write it to FTA with your detailed scenario and they will guide you.

            Speaking about clauses, the article which I referred to you in my previous comment has it. You can refer it.

        • Fahim Lashkaria says

          August 6, 2019 at 11:51 pm

          What I mean to say is:
          Point 1 and 2 compile a local transaction not export. where you receive payment from a local client and issue an invoice to a local client.

          and if you have done it that you received a payment from local client and issued a bill to the foreign client its wrong.

          3 and 4 compile to make an import transaction. so your supplier is not liable to charge you vat. you will do it on reverse charge basis. Report in your import and then take input.

          So what you are saying again and again to report the vat difference is totally wrong. Both transactions will be differently reported in your books of account.

          IF still not clear you can call me as and when required over the phone.

          Reply
  23. Hasnain Raza says

    August 6, 2019 at 4:17 pm

    Dear Fahim,

    Thank you. It’s well understood. So I will file VAT as the difference in VAT received in UAE and VAT paid to KSA supplier?

    Reply
    • Fahim Lashkaria says

      August 6, 2019 at 4:21 pm

      You are still getting that wrong buddy. please consult local accounting firm for this they will be able to help you. We can’t talk on messages.

      Reply
  24. Hasnain Raza says

    August 7, 2019 at 1:00 am

    Can I have your number?

    Reply
    • Fahim Lashkaria says

      August 7, 2019 at 7:33 am

      +919687858563

      Reply
  25. AG-company says

    February 22, 2020 at 11:38 am

    Dear Mr. Fahim
    Please clarify on below:
    We have purchased item from JAFZA, for the Amount of Dhs. 100,000/-
    They asked us to give Import code, and mentioned it will be under RCM.
    As per my knowledge, the amount 5,000/- will appear in our FTA account as Goods Imported to the UAE. That means we have to pay that amount to FTA.

    Please guide me how to get that amount back to our account? As they will not give TAX Invoice and we cannot pass the entry. As per my knowledge we no need to pay that VAT to FTA. Please clarify

    Reply
    • Fahim Lashkaria says

      February 22, 2020 at 3:53 pm

      According to Article 48 of VAT Law, in cases where 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. He shall be responsible for all applicable taxes.

      VAT amount paid is considered as output tax must be declared VAT return. You can claim input credit against it if applicable. Make sure you maintain the necessary documents like invoices for future reference.

      Reply
  26. Shafeek says

    May 2, 2020 at 4:21 pm

    Dear

    We purchased one vehicle from one Oman dealer in UAE ,and they have imported the vehicle through our address .
    Now the concern is that the vehicle price they give us and the the value showing in the custom paper has difference.
    How we can claim the VAT based on the custom paper or as per dealer invoice (not a tax invoice)
    The value showing in the portal as per the customs declared value .

    Reply
    • Fahim Lashkaria says

      May 5, 2020 at 11:19 am

      Car is purchased for office use or personal use?
      If it is for personal use, you need to approach FTA for clearance.
      IF it is for company use then pay VAT on seller Invoice or ask for a rectified invoice.

      Reply
  27. Fahad says

    May 21, 2020 at 2:11 am

    My company is a gift card aggregator & supplier. We buy gift cards from suppliers across MENA, and also from the rest of the world and then those gift cards are sold to customers both in MENA and rest of the world. Besides this, we also buy services in form of Google ads, email, Accounting software and other subscriptions.

    Do we need to declare these under RCM? There are no physical goods involved, every card is digitally received and sent

    Reply
    • Fahim Lashkaria says

      May 21, 2020 at 6:46 pm

      Those sold in UAE are subject to RCM and others are export and they are out of scope.

      Reply
  28. Murtaza says

    May 27, 2020 at 6:22 pm

    Dear Fahim sir
    greetings!!
    We had declared one shipment as Import to local from Rest of world for re-export but subsequently not re-exported and sold it locally , now in VAT return BOX 6 this declaration details not showing (as it was cleared as for re-export)

    now can we put this amount in box 7 manually ?? or anything we have to do additionally ??

    Reply
    • Fahim Lashkaria says

      May 28, 2020 at 11:43 am

      Insert the details of this in the voluntary disclosure.

      Reply
  29. Ram says

    October 26, 2020 at 12:31 pm

    Dear Fahim,
    One of our supplier located in designated zone is not yet registered due to threshold value. He supplier items imported under his custom code. Should we accept a tax invoice from him with RCM?

    Reply
    • Fahim Lashkaria says

      October 26, 2020 at 12:57 pm

      yes

      Reply
  30. Mohmmed says

    November 18, 2020 at 1:07 pm

    Dear Mr Fahim
    hope are well and safe..
    We have built warehouse and labour Camp on leased land,
    We have registered with FTA as a individual person and have TRN number also as we are leasing out warehouse and labour camp to third party charging vat also

    but if we like to sale whole property to someone else who is not registered person, do we need to make TAx invoice for whole property?? and charge him VAT

    and after sale of property our income will be below threshold , do we have to deregister our name also from FTA??

    Reply
    • Fahim Lashkaria says

      November 23, 2020 at 7:59 pm

      It depends on the value of the property. IF it is above the threshold limit, your buyer has to register and pay VAT on it and you will also issue a VAT invoice.

      Deregistering is an option when you know that your sale is not going to go above the threshold in near future at least the upcoming 12 months ahead.

      Reply
  31. Murtaza says

    November 21, 2020 at 12:24 pm

    Dear Mr Fahim
    hope you are safe and healthy
    i have warehouse and labour camp on leased land and i am letting these warehouses & labour camp to third party, i am registered as a individual with FTA, now i m selling whole property to another individual , shall i have to charge him VAT for whole property sale transaction???
    what to do with VAT collected and paid by me for current leased contracts??
    regards
    Murtaza

    Reply
    • Fahim Lashkaria says

      November 23, 2020 at 7:35 pm

      Yes, you have to charge him VAT for the whole property sale transaction.
      All the VAT collected and paid will be adjusted against the tax liability.

      Reply
  32. murtaza says

    December 20, 2020 at 3:13 pm

    Dear Mr. Fahim
    Greetings!!
    sales Made Outside the scope of UAE VAT , where to show in VAT return ?? Under Which Box?? Exempt Item or Zero Rated??

    (good supplied from China to Africa region but invoicing done in Dubai)

    kindly revert
    Murtaza

    Reply
    • Fahim Lashkaria says

      December 23, 2020 at 12:34 pm

      exempt

      Reply

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