- Businesses in the UAE importing services from abroad must understand VAT implications under the Reverse Charge Mechanism (RCM).
- RCM shifts VAT reporting and payment obligations from the non-resident supplier to the UAE recipient.
- The recipient must self-assess VAT, report it as output tax, and may claim input VAT if eligible.
- A tax invoice must be issued to oneself within 14 days of supply, serving as a transaction record and basis for input VAT recovery.
- Exceptions to self-invoicing exist if the foreign supplier provides a proper commercial invoice and VAT is accurately recorded.
- If no invoice is received or it lacks details, the recipient must issue a tax invoice or seek an exemption from the FTA.
- VAT must be recognized in accounting records even if not paid to the foreign supplier.
Source: claemirates.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.
