TaxSavvyAE

Foreign company selling into the UAE

We are an Indian software company selling subscriptions to UAE customers. Do we need UAE VAT registration?

The situation

Foreign businesses have no threshold when they make taxable supplies in the UAE and no one else accounts for the VAT. Where the customer is a VAT-registered business, the customer usually accounts for VAT under reverse charge.

The law

  • Art 48, Federal Decree-Law 8 of 2017: Reverse charge on imported services by registered recipients
  • Art 13, Federal Decree-Law 8 of 2017: Mandatory registration above AED 375,000 in 12 months or expected within 30 days

What it means for you

If you sell only to UAE VAT-registered businesses, they self-account and you may not need to register. If you sell to consumers or unregistered businesses, you generally must register and charge 5 percent. Example: an Indian SaaS firm with 500 UAE consumer users must register; one with only corporate clients that are VAT registered may not.

What to do

  1. List UAE customers and their VAT status.
  2. If any are consumers or unregistered, plan registration.
  3. Appoint a tax agent if required.
  4. Charge 5 percent on taxable supplies.

We can do this for youVAT registration on EmaraTax: threshold test, voluntary registration, non-residents and tax groups: AED 950

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