On the 24th of February 2023, the UAE Federal Tax Authority (FTA) published VAT Public Clarification VATP033, which highlights amendments to VAT reporting across the United Arab Emirates. The amendment is relevant to those in the E-commerce sector including a broad range of concepts such as robotic devices, stores in the metaverse, smart kiosks and so on.
It is necessary that potential qualifying registrants assess their annual revenue and align with reporting requirements in order to ensure VAT compliance and avoid penalties or fines. Read more about the new amendment here.
Criteria and Conditions
The following details the factors that potential registrants should be taken into account and in which Emirate their supply of goods and/or services are to be reported.
The general rule is applicable to:
- All entities that do not meet the Public Clarification criteria, for all their supplies of goods and services
- For entities that do meet the criteria, for their supplies under 100million AED
All registrants are still required to report taxable supplies subject to VAT at the standard rate in Box 1 of the VAT Return. The reporting should be done in the Emirate where the taxable person’s establishment, most closely related to the supply, is located.
Public Clarification VATP033
The Public Clarification applies to the case of taxable supplies on E-Commerce that exceeds 100million AED every year.
According to the amended article 72 of the executive regulation and VATP033, taxable persons/qualifying registrants are those supplying goods and services, including those made through E-commerce, that exceed AED 100 million in a calendar year.
Reporting under this amendment will be required from 1st July, 2023 and is to be recorded in Box 1 of the VAT Return. The reporting should be done in the Emirate in which the taxable supplies are received by the customer – relevant supporting evidence should be kept. This Emirate shall be determined by the location specified by the customer, rather than their place of residence, IP or billing address.
For any assistance relevant to e-commerce reporting, tax, CFO, business advisory or accounting services, do not hesitate to contact us here.