The United Arab Emirates cabinet has amended the VAT Executive Regulations (the VAT regulations) modifying cases where supplies of goods and services made within a designated zone are treated as supplies made outside the United Arab Emirates.
Supplies of goods
New paragraph 5 of article 51 of the VAT regulations provides that, in addition to the case where goods supplied within a designated zone are not consumed and are either incorporated, attached, become part of or are used in the production of another good in the same designated zones, the following supplies of goods are also treated as supplies made outside the United Arab Emirates if:
- the goods were delivered to a place outside the United Arab Emirates, and the supplier provides supporting commercial or official evidence (i.e. customs evidence) proving that the goods were removed from the designated zone; or
- the goods were moved from the designated zone to a place inside the United Arab Emirates, and the supplier retains official evidence establishing that VAT had been applied to that import.
Supplies of services
New paragraph 7 of article 51 of the VAT regulations provides that the place of supply of services within a designated zone is treated as a supply made outside the United Arab Emirates where shipping or delivery services are supplied directly in connection with goods that have a place of supply outside the United Arab Emirates and all of the following conditions are met:
- shipping or delivery services are supplied by the same supplier of the goods;
- the supplier of the goods is a non-resident and not registered for VAT purposes;
- these goods are sold via an electronic sales platform; an electronic sales platform means any type of online sales platform, including websites and electronic applications, which brings together third-party sellers and buyers, and through which goods may be sold and purchased with or without shipping or delivery services; and
- the person owning the electronic sales platform is not the supplier of the goods.
Cabinet Decision No. 88 of 2021 amending the VAT Executive Regulations became effective from 30 October 2021.