VAT Reverse Charge Obligation for Electronic Devices Explained

• The UAE has introduced a reverse charge obligation for the supply of electronic devices.
• The term “Electronic Devices” includes mobile phones, smartphones, computer devices, and tablets.
• The FTA has clarified that “resell” refers to trading in electronic devices, and “producing or manufacturing” includes partial or full production.
• The definition of “mobile phones and smartphones” is broad and includes devices that operate through wireless transmission.
• The definition of “computer devices” is also broad and includes various types of computers.
• “Tablets” are considered wireless, portable personal computers with a touchscreen interface.
• A Ministerial Decision has been issued to define “pieces and parts related to Electronic Devices” that are subject to the reverse charge rules.
• The reverse charge will not apply to pieces or parts that enhance the functioning or enjoyment of an electronic device but are not necessary for its operation.
• VAT-registered suppliers are not responsible for charging or accounting for VAT on electronic device supplies to VAT-registered recipients.
• Recipients of electronic devices must self-account for VAT on the value of the supplied devices under the reverse charge.
• The reverse charge rules also apply to goods moved from mainland UAE to designated zones.
• Conditions for applying the reverse charge mechanism include providing a written declaration and verifying the VAT registration status of the recipient.
• Failure to provide necessary declarations may result in the recipient being unable to recover input VAT incurred.

Source: insightplus.bakermckenzie.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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