1. Introduction
1.1 Overview
1.1.1 Short Brief
VAT was introduced with effect from 1 January 2018 in the UAE. As a general consumption tax on the supply of goods and services, it applies to supplies which take place within the territorial area of the UAE.
1.1.2 Purpose of this document
This document contains guidance about the VAT treatment of supplies of goods and services through electronic means, such as over the internet or a similar electronic network.
The purpose of this document is to provide guidance on how VAT affects businesses which operate within the e-commerce sector.
1.1.3 Who should read this document?
This document should be read by businesses involved in the e-commerce sector. It is intended to be read in conjunction with other relevant guidance published by the Federal Tax Authority (“FTA”).
1.1.4 Status of the document
In this guide, Federal Decree-Law No. 8 of 2017 on Value Added Tax is referred to as “Decree-Law” and Cabinet Decision No. 52 of 2017 on the Executive Regulation of the Federal Decree-Law No. 8 of 2017 on Value Added Tax and its amendments is referred to as “Executive Regulation”. This guidance is not legally binding on the FTA but is intended to provide assistance in understanding and applying the VAT legislation as it applies to e-commerce.
This guide is issued in accordance with Article 73 of the Executive Regulation and provides general guidance concerning the application of the Decree-Law and Executive Regulation in respect of e-commerce in the United Arab Emirates. This guide does not deal with all the legal details associated with VAT and is not intended for legal reference. For details in respect of the general operation of VAT, refer to the Taxable Person Guide – Value Added Tax which is available on the FTA website (www.tax.gov.ae).
Download the complete E-Commerce VAT Guide – VATGEC1 Aug 2020