Foreign companies providing digital services to UAE clients must register for VAT

According to the UAE Federal Tax Authority’s (FTA) E-Commerce VAT Guide (VATGEC1), foreign companies that offer electronic or remote services to individuals or non-VAT-registered businesses in the UAE are required to register for VAT and account for it directly.

Key VAT Requirements for Non-Resident Service Providers:

• VAT Registration Is Mandatory for B2C Services
• The Reverse Charge Mechanism Does Not Apply in B2C Transactions

When VAT Registration May Not Be Required

• Supplying Services to VAT-Registered UAE Companies (B2B)
• KHDA-Approved Online Educational Services

Consequences of Non-Compliance:

• Foreign suppliers who delay VAT registration may face serious financial exposure:
• AED 10,000 fine for late VAT registration

Source: zawya.com

 

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