- The principles laid in this clarification may have a potential impact on the other industry sectors as well that are engaged in import of services.
- The FTA has clarified that the recipient of concerned services would be required to self-issue a tax invoice for the supply made to itself as the UAE VAT law shifts the responsibility on the recipient to fulfil the tax obligations under Reverse Charge Mechanism.
- If such is the case, businesses should reassess compliance requirements on self-issuance of (valid) tax invoices
- Alternatively businesses should consider taking an administrative exception under Article 59(7)(b) of the Executive Regulations to the VAT Decree Law for allowing alternative document for services received under RCM. However, this article is meant for cases where a taxable person is not able to issue a compliant tax invoice.
Source: MMJS
