UAE VAT Compliance Diploma

Module C - Chapter 15: Powers,

Appeals and Assessments

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 Introduction GCC
Framework Agreement

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Introduction - GCC Framework Agreement

▪ Art. 72 Agreement

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Introduction - GCC Framework Agreement (continued)

▪ Art. 59 Agreement

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Introduction - GCC Framework Agreement (continued)

▪ Art. 74 Agreement

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 Inspection of Premises
and Tax Audit

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Inspection of Premises and Tax Audit

▪ Art. 17 Tax Procedures Law

The right of the Authority to perform a Tax Audit

1. The Authority may perform a Tax Audit on any Person to ascertain the extent
of that Person’s compliance with the provisions of this Law and the Tax Law
2. The Authority may perform the Tax Audit at its office or the place of business
of the Person subject to the Tax Audit or any other place where such Person
carries on Business, stores goods or keeps records
3. If the Authority decides to perform a Tax Audit at the place of Business of the
Person subject to the Tax Audit or any other place where such Person carries
on his Business, stores goods or keeps records, the Authority must inform
him at least five business days prior to the Tax Audit
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THE AUTHORITY has informed Mr Rashid that they will be inspecting his premises for an
Audit. They have informed him 10 days prior to the inspection.

Is this notice period lawful?

A: No, the notice period in case of inspection by THE AUTHORITY is 30 days

B: Yes, the notice period in case of inspection by THE AUTHORITY is 5 days

C: No, the notice period in case of inspection by THE AUTHORITY is 20 days

D: Yes, 10 days is the correct minimum notice period in case of inspection by THE
AUTHORITY

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THE AUTHORITY has informed Mr Rashid that they will be inspecting his premises for an
Audit. They have informed him 10 days prior to the inspection.

Is this notice period lawful?

A: No, the notice period in case of inspection by THE AUTHORITY is 30 days

B: Yes, the notice period in case of inspection by THE AUTHORITY is 5 days

C: No, the notice period in case of inspection by THE AUTHORITY is 20 days

D: Yes, 10 days is the correct minimum notice period in case of inspection by THE
AUTHORITY

B is the correct
answer

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Tax Audit without prior notice
▪ Art. 17 (4) Tax Procedures Law

By way of exception to Clause (3) of this Article, the Tax Auditor has the right of entry to any place
where the Person subject to the Tax Audit conducts his Business, stores goods, or keeps records,
and as the case may be, it will be temporarily closed in order to perform the Tax Audit for a period not
exceeding 72 hours without prior notice in any of the following cases:

a. If the Authority has serious grounds to believe that the Person subject to the Tax Audit is
participating or involved in Tax Evasion in respect to this Person or another Person;

b. If the Authority has serious grounds to believe that not temporarily closing the place where the
Tax Audit is conducted will hinder the conduct of the Tax Audit;

c. If the Person who has been given advance notice of the Tax Audit under Clause (3) of this Article
attempts to hinder the Tax Auditor’s access to the place where the Tax Audit is to be performed.

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Tax Audit without prior notice
▪ Art. 17 Tax Procedures Law (continued)

5. In all cases provided for in Clause (4) of this Article, the Tax Auditor shall obtain the prior written
consent of the Director-General; and if the place to be accessed is a place of residence, then a
permit from the Public Prosecutor shall also be obtained.

6. Places closed under this Article shall be reopened after the lapse of 72 hours, unless the
Authority obtains a permit from the Public Prosecutor to extend the closure period for a similar
period prior to the expiry of the preceding 72 hours.

7. A criminal case may be initiated only upon an application from the Director-General.

8. The Executive Regulation of this Law shall determine the necessary procedures related to the
Tax Audit.

Details is Arts. 10-12 of the Tax Procedures Executive Regulations

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What is the minimum amount of time for which THE AUTHORITY is permitted to
close a trader’s business for a Tax Audit?

A: 48 hours

B: 72 hours

C: 144 hours

D: 5 business days

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What is the minimum amount of time for which THE AUTHORITY is permitted to
close a trader’s business for a Tax Audit?

A: 48 hours

B: 72 hours

C: 144 hours

D: 5 business days

B is the correct answer –

72 hours may be
extended by a further 72
hours

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 Powers to Obtain

Information and Documentation

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Powers to Obtain Information and Documentation

▪ Art. 18 Tax Procedures Law

The Right of the Authority to Access the Original Records or Copies

Thereof During a Tax Audit
While conducting a Tax Audit, the Tax Auditor may obtain original records or
copies thereof, or take samples of the stock, equipment or other assets from the
place at which the Person subject to the Tax Audit carries on his business or
which are in his possession, or may seize them in accordance with the rules that
shall be specified in the Executive Regulations of this Law.

→ Art. 14 Executive Regulation on Tax Procedures: Power to remove

and retain Original Documents or Assets or make Copies Thereof
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 Examination of Records

and Assessments

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Cooperation during the Tax Audit

▪ Art. 21 Tax Procedures Law

Cooperation during the Tax Audit

Any Person subject to a Tax Audit, his Tax Agent or Legal Representative shall
facilitate and offer assistance to the Tax Auditor to enable him to perform his
duties

What is the consequence if there is no

facilitation of the work of a Tax Auditor?

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Cooperation during the Tax Audit

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Examination of Records and Assessments (continued)

▪ Art. 22 Tax Procedures Law

The Rights of The Person who is Subject to Tax Audit

The person subject to tax audit shall have the right to:
1. Request the Tax Auditors to show their job identification cards
2. Obtain a copy of the Tax Audit Notification
3. Attend the Tax Audit which takes place outside the Authority
4. Obtain copies of any original paper or digital documents seized or obtained
by the Authority during the Tax Audit, according to what is specified in the
Executive Regulation of this Law

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Examination of Records and Assessments (continued)

▪ Art. 23 Tax Procedures Law

Notification of the Tax Audit Results

1. The Authority shall inform the Person subject to Tax Audit of the final results
of the Tax Audit within the time limit and according to the procedures
specified in the Executive Regulation of this Law
2. The Person subject to the Tax Audit may view or obtain the documents and
data on which the Authority based its assessment of Due Tax according to
the provisions specified in the Executive Regulation of this Law

→ Art. 17, 18 and 19 Executive Regulation on Tax Procedures: Result of

the Audit, Notice to provide Information or Documents, Complying with
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Notifications 20
 Tax Assessments

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Tax Assessments – Article 24 Tax Procedures Law

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Tax Assessments – Article 24 Tax Procedures Law

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Notification of Tax Assessment – Tax Procedures ER

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Notification of Tax Assessment

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 Administrative
Penalties Assessments

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Administrative Penalties Assessments (continued)

▪ To be discussed in chapter 16

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 Tax Evasion
Penalties

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Tax Evasion Penalties (continued)

▪ To be discussed in chapter 16

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 Reconsideration, Dispute
Resolution and Appeals

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Reconsideration, Dispute Resolution and Appeals

Relevant articles (Tax Procedures Law - TPL)

▪ Art. 27 TPL - Procedures for Application for Reconsideration
▪ Art. 28 TPL - Tax Disputes Resolution Committee
▪ Art. 29 TPL - Jurisdictions of the Committee
▪ Art. 30 TPL - Procedures for Submitting Objections
▪ Art. 31 TPL - Procedures of the Committee
▪ Art. 32 TPL - Enforcement of the Committee’s Decision
▪ Art. 33 TPL - Challenge Procedures before Courts

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Procedural Framework

▪ What are the steps for any person that does not agree with a decision of
the FTA?

Step 1. Step 2. Step 3.

Application for Objections to Challenges
reconsideration the committee before court

Article 27 TPL Article 28 TPL Article 33 TPL

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Summary (Articles 27-33 of the TPL)

Disagree Tax Assessment Agree

40 business days

Disagree or no decision
within 40 business days Reconsideration Agree

40 business days
Disagree or no decision Dispute value
within 40 business days Tax Disputes Resolution less than AED
AND dispute value more Committee (TDRC) 100,000
than AED 100,000
OR
40 business days Agree

* Business days to mean

“week days” Federal Primary Court

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Procedural Framework (continued)

▪ Step 1: Applications for Reconsideration

The application for reconsideration can be requested by any person who
disagrees with any decision (in whole or in part) issued by the Authority in
connection with him.

▪ Reconsideration performed by the Authority

▪ By a person independent of the decision maker?
▪ Important that reviewer understands their role.
▪ What does FTA guidance require them to take into consideration?
▪ What are they required to ignore?

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Procedural Framework (continued)

▪ Step 1: Time limits for reconsideration (Art. 27 of Tax Procedures Law)

Reconsideration request The Authority must inform

should be submitted to the the applicant of its decision
Authority within 40 days within 5 business days of
from notification date issuing the decision

40 business days 40 business days 5 business days

The Authority shall issue its

Decision
decision within 40 business
days from receipt of such
application
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Procedural Framework (continued)

▪ Step 2: Tax Disputes Resolution Committee

The Tax Disputes Resolution Committee is established by the: Cabinet

Decision No (23) of 2018 - Tax Disputes Resolution Committee.
This Decision has been published in the Official Gazette May 2018.
In accordance with the provisions of articles 28 to 32 of the UAE Tax Procedure
Law, the Tax Disputes Resolution Committee (“TDRC”) is the last appeal step
before submission of an appeal before the Courts

Art 28 TPL

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Procedural Framework (continued)

▪ Step 2: Tax Disputes Resolution Committee

Three Committees are to be set up:
▪ Tax Dispute Resolution Committee - Emirate of Abu Dhabi; in charge of
taxpayers resident in Abu Dhabi as well as non-residents taxpayers
▪ Tax Dispute Resolution Committee - Emirate of Dubai; in charge of taxpayers
resident in Dubai (two chambers have been set up)
▪ Tax Dispute Resolution Committee - Emirate of Sharjah; in charge of
taxpayers resident in Sharjah and in the Northern Emirates

The TDRCs are supervised by the Ministry of Justice from an administrative and
financial perspective.

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Procedural Framework (continued)

▪ Step 2: Tax Disputes Resolution Committee

▪ Each committee is headed by member of judiciary authority and two expert

members registered in the tax expert list, and appointed by a decision from
the Minister of Justice in coordination with the Minister of Finance

▪ Membership in the committee is for one year and can be extended for
additional periods not exceeding 3 years
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Procedural Framework (continued)

▪ Step 2: Jurisdiction of the Tax Dispute Resolution Committee:

▪ Decide in respect of objections submitted regarding the Authority’s decisions

following reconsideration requests.
▪ Decide in respect of reconsideration requests submitted to the Authority
and yet, the Authority has not made a decision in accordance with the
provisions of the Tax Procedures Law.
▪ Any other jurisdiction entrusted to the Committee by the Cabinet.

Art 29 TPL

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Procedural Framework (continued) Art 30 TPL

▪ Step 2: Jurisdiction of the Tax Dispute Resolution Committee

An objection submitted to the committee shall not be accepted in the

following instances:
▪ If a reconsideration request has not been previously submitted to the
Authority;
▪ If the Tax and Penalties subject of the objection have not been settled

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Procedural Framework (continued) Art 30-31 TPL

▪ Step 2: Time limits for appeal at the Tax Disputes Resolution Committee (TDRC)
Objection regarding the The Committee must inform the
Authority’s decision on a Person submitting the objection of its
reconsideration request shall be decision within 5 business days of
submitted within 40 business issuing the decision
from the date of notification

40 business days 40 business days + 5 business days

Maximum 40 days
The Committee shall review the objection
Date of notification submitted and make a decision within 40
of the Authorities business days from receipt of the objection.
Reconsideration
decision * The Committee may extend the time for
making its decision (31(2) Tax procedures Law)
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with maximum 40 days/ 41
Procedural Framework (continued) Art 31-32 TPL

▪ Step 2: Tax Disputes Resolution Committee

Amount in dispute does not exceed AED 100,000

The Tax Disputes Resolution Committee’s decision is considered as
final and cannot be appealed before the Courts where the total amount of the
Tax and Administrative Penalties due is not more than AED 100,000.
*(Article 31 (4) of the Federal Law no.7. of 2017 on Tax Procedures)

Amount in dispute (Tax and Penalty) does exceed AED 100,000

A decision of the Tax Disputes Resolution Committee can be appealed
before the Courts within 40 business days of its issuance, provided the amount
at stake exceeds AED 100,000.
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Procedural Framework (continued) Art 32 TPL

▪ Step 2: Tax Disputes Resolution Committee

Amount in dispute does exceed AED 100,000 (but not challenged within
the time limits)
Final decisions of disputes issued by the TDRC exceeding 100,000 Dirhams
shall be treated as executory instruments if they are not challenged before the
Competent Court within 40 business days from the date of rejection of the
objection.

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Procedural Framework (continued) Art 33 TPL

▪ Step 3: Challenges before Courts

40 business days The Authority and a Person may challenge any of the
Committee’s Decision before the Competed Court within
40 business days from the objector being notified
Date of notification of
the TDRC decision

Challenges may be made to the Competent Court in the following instances:

▪ There being an objection to the whole or part of the decision of the Committee.
▪ A decision not having been issued by the Committee regarding an objection
submitted to it in accordance with the provision of the Tax Procedures Law.
▪ * First an objection should have been submitted to the TDRC
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 Clarifications

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Clarifications – User Guide from FTA

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What is a Clarification?

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Who is qualified to apply for a Clarification?

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When the FTA will not provide Clarification

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Procedural Framework (continued)

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Clarifications - What if You Disagree?

Challenge
Reconsideration Objections to the
Clarification process procedure before
request committee
court

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 UAE VAT Compliance Diploma
Module C - Chapter 16: Penalties

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Disclaimer

"This publication has been prepared for general guidance on matters of interest only,
and does not constitute professional advice. The information contained within this
publication will be based on the law, regulations and guidance applying at the date the
publication is produced. We will not monitor or be responsible for the effects of any
subsequent changes in law, regulations or guidance.

You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given
as to the accuracy or completeness of the information contained in this publication, and,
to the extent permitted by law, PricewaterhouseCoopers (Dubai Branch), its members,
employees and agents do not accept or assume any liability, responsibility or duty of
care for any consequences of you or anyone else acting, or refraining to act, in reliance
on the information contained in this publication or for any decision based on it."
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 Introduction

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Introduction (type of) penalties

Penalties

Administrative Penalties Tax Evasion Penalties

Article 76 VAT Law

Article 25 Tax Procedures Law Article 77 VAT Law
Article 26 Tax Procedures Law
Cabinet Resolution No. (49) of
2021 on Administrative Penalties
for Violations of Tax Laws in
UAE
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 Administrative
Penalties

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Administrative Penalties Assessments

▪ Article 76 VAT Law (main article)

▪ Art. 25 Tax Procedures Law –
list of penalties / in which cases→ article 25 Tax Procedures Law –
See next slide

What are the applicable penalties for the categories mentioned?:

→ Cabinet Resolution No. (49) of 2021 on Administrative Penalties for

Violations of Tax Laws in UAE – effective from 28 June 2021.

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UAE VAT Law

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 Tax Procedures

Administrative Penalties Assessments –

Law

Article 25 Tax Procedures Law

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Administrative Penalties Assessments (continued)

▪ Art. 25 Tax Procedures Law

Administrative Penalties Assessment

2. The Executive Regulation of this Law shall specify the information and data
that must be included in the Administrative Penalties Assessment
3. The Cabinet shall issue a resolution that specifies the Administrative
Penalties for each of the violations listed in Clause (1) of this Article. Such
Administrative Penalties shall be no less than 500 Dirhams for any
violation and shall not exceed three times the amount of Tax in respect
of which the Administrative Penalty was levied

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Notification of Tax Assessment
ER on the Tax Procedures Law article 21 (cabinet decision no 36)

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 Cabinet Resolution No. (49)
of 2021 on Administrative
Penalties for Violations of Tax
Laws in the UAE

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Reduction or Waiver for Administrative Penalties

▪ Art. 46 Tax Procedures Law

Reduction of Administrative Penalties or Waiving Therefrom

If the Authority imposes an Administrative Penalty on any Person for violating the
provisions of this Law or the Tax Law, the Authority may reduce or waive such
Administrative Penalty if the Person produces evidence justifying the reason for
his failure to comply, pursuant to the controls specified in the Executive
Regulation of this Law.

→ Art. 26 Executive Regulation on Tax Procedures: Reduction of

Administrative Penalties or Exemption Therefrom

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Reduction or Waiver for Administrative Penalties (continued)
Article 26 of the Tax Procedures Executive Regulations:

1. The Authority may reduce or waive Administrative Penalties for any Person or category whose violation of the
provisions of the Law or Tax Law was proved, if the following conditions are met:

a. There is an excuse that is acceptable to the Authority.

b. Availability of evidence that justifies the existence of the excuse and the violation it caused, which led to the
imposition of Administrative Penalties.

2. Without prejudice to the provisions of Clause (1) of this Article, any Person or category whose violation of the
provisions of the Law or Tax Law was proved, may apply to the Authority to reduce or waive the penalties it imposed
according to the following provisions:
a. There is an excuse that is acceptable to the Authority.
b. Availability of evidence that justifies the existence of the excuse and the violation it caused, which led to the
imposition of Administrative Penalties.
c. The reduction or exemption application is notified to the Authority, as per the mechanism it specifies, within 40
business days from the end of the acceptable excuse.
d. The Person demonstrates that they have corrected their violation.
e. The request for reduction or exemption is submitted to the Authority in the form it specifies.

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Reduction or Waiver for Administrative Penalties (continued)

Article 26 of the Tax Procedures Executive Regulations (continued):

3. An excuse is not considered accepted if the act that led to the violation was deliberate.

4. For the purposes of implementing the provision of paragraph (a) of Clause (1) and paragraph (a) of Clause (2) of this
Article, the acceptance of an excuse shall be based on a decision by a tripartite committee, set up by a decision of
the Director-General and has the mandate to review the excuse and accept or reject it.

5. The Authority shall make its decision in respect of the reduction of the Administrative Penalties or exemption
therefrom within 40 business days from the date of receiving the application, if any, and shall notify the applicant of
the decision within 10 business days from the date of issuance.

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Cabinet Resolution No. (49) of 2021

▪ See document PDF / Hard Copy

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 Voluntary
Disclosure

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Voluntary Disclosure Main legislation:
Article 10 of the
TPL and Article 8
of ER to TPL

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Voluntary Disclosure – Article 10 Tax Procedures Law

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 VD also needs to be filed for Article 8 ER on the TPL
input VAT not claimed within
2 tax periods
AED
10,000
VAT
underpay
ment
thresholdr

No
threshold
for
excessive
refunds!

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Voluntary Disclosure Form Snippet

Pre-populated

“As Reported” and “As Current” columns to appear on all Boxes of the original VAT
return

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Voluntary Disclosure Form Snippet

A letter should be uploaded along with the voluntary disclosure form which would provide the
background facts and a detailed description of the error(s) disclosed in this Voluntary
Disclosure Form.
This letter should also indicate the reasons for the Voluntary Disclosure and the errors
disclosed, as well as the impact on the relevant sections/boxes of the tax return.

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Example 1

Background

Company A filed a Tax Return for Jan- March 2022 on 28 April 2022. The payable
(Tax) amount was AED 30,000

They realize that they should have filed an amount of AED 45,000. This is the
Company’s second offence.

Company A filed AED15,000 less than he should have filed.

AED 15,000 > 10,000 AED → Company A must file a Voluntary Disclosure (VD)

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Example 1 – Voluntary Disclosure (continued)

Table 1, Serial No. 10 – Penalty for incorrect return filing:

Fixed penalty: AED 2,000 (as it
is Company’s second offence). 1. Fixed penalty shall be applied:

1,000 for the first time.

2,000 in case of repetition.
Clause 2 and 3 of serial no. 10 2. As an exception to Clause 1 of this penalty, if the incorrect Tax Return results in
do not apply as tax difference a Tax difference less than the fixed penalty listed in Clause 1 of this penalty, a
penalty equal to the that Tax difference of at least 500 shall be imposed.
(AED 15,000) is in excess of
the fixed penalty. 3. Anyone correcting their Tax Return prior to the due date of payment shall be
excluded from the penalty imposed under Clauses 1 and 2 of this penalty.

AND
In addition- penalty under
serial no. 11 is to be calculated Table 1, Serial No. 11 – Penalty submittal of a Voluntary Disclosure by the
Person/Taxpayer on errors in the Tax Return, Tax Assessment or refund
application pursuant to Article 10(1) and 10(2) of the Tax Procedures Law.

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Example 1 – Voluntary Disclosure (continued)

Fixed penalty: AED 2,000 (as it is Table 1, Serial No. 11 – Penalty submittal of a Voluntary Disclosure by the
Company’s second offence). Person/Taxpayer on errors in the Tax Return, Tax Assessment or refund
application pursuant to Article 10(1) and 10(2) of the Tax Procedures Law.
PLUS any one of the following
depending on when VD is filed: Without prejudice to the potential consequences of the penalty mentioned in Clause
10 of this Table, a percentage-based penalty shall be applied on the difference
between the Tax that was calculated and that which should have been calculated,
1. AED 750 (5% of 15,000) if VD filed pursuant to the following:
before 29 April 2023 1. 5% on the difference, where the Voluntary Disclosure is submitted within one
2. AED 1,500 (10% of 15,000) if VD filed year from the due date of submission of the Tax Return, the Tax Assessment, or
between 29 April 2023 – 28 April 2024 the relevant refund application;
3. AED 3,000 (20% of AED 15,000) ) if 2. 10% on the difference, where the Voluntary Disclosure is submitted within the
VD filed between 29 April 2024 – 28 second year following the due date of submission of the Tax Return, the Tax
Assessment, or the relevant refund application;
April 2025 3. 20% on the difference, where the Voluntary Disclosure is submitted within the
4. AED 4,500 (30% of AED 15,000) if VD third year following the due date of submission of the Tax Return, the Tax
filed between 29 April 2025 – 28 April Assessment, or the relevant refund application;
2026 4. 30% on the difference, where the Voluntary Disclosure is submitted within the
5. AED 6,000 (40% of AED 15,000) if VD fourth year from the due date of submission of the Tax Return, the Tax
filed on or after 29 April 2026 Assessment, or the relevant refund application;
5. 40% on the difference, where the Voluntary Disclosure is submitted after the
fourth year from the due date of submission of the Tax Return, the Tax
Assessment, or the relevant refund application.
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 Example 2

• A taxable person submitted his VAT return for the August month on the 5th of
September 2021.
• On 15 September 2021, it became clear to him that he had submitted an incorrect
tax return. Is a fine for valid tax return imposed? When is the payment due date?

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 Example 2

• A taxable person submitted his VAT return for the August month on the 5th of
September 2021.
• On 15 September 2021, it became clear to him that he had submitted an incorrect
tax return. Is a fine for valid tax return imposed? When is the payment due date?
- No penalty is imposed on the person because a
correction of the VAT return has been submitted
before the deadline (28 September).

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Example 3 – Voluntary Disclosure

Background

Company B filed a Tax Return. The payable (Tax) amount was AED 20,000

They realize that he should have filed an amount of AED 25,000

Company B filed AED 5,000 less than he should have filed.

AED 5,000 < 10,000 AED →The Taxable Person to correct the error in the Tax Return for the Tax
Period in which the error has been discovered, if the Taxable Person is obligated to submit a Tax
Return to the Authority for this Tax Period.

Penalty for submission of incorrect VAT return still applicable (even though no VD is to be
filed!) – AED 1,000 for the first offence or AED 2,000 in case of repetition

if there is no Tax Return through which the error can be corrected – Voluntary Disclosure (8(2)(b) ER on the TPL
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Example 3
The Taxpayer
Underpaid becomes aware of the
VAT: incorrect Tax Returns
submitted for Q1, Q2
AED 6,000
and Q3 2019

Q1 Q2 Q3 Q4 Correction in
Tax Return
2019 2019 2019 2019 for Q4 2019

Underpaid VAT: Underpaid VAT:

AED 8,000 AED 4,000

No VD but penalty for submission of incorrect tax return applicable!

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Example 4

Office rent paid: The Taxpayer files its

AED 180,000 first Tax Return for
+ 9,000 VAT Q3 2019

May the
Taxpayer
28 recover the VAT
January 2019 March 1 July 2019 October 1 November
2019 2019
paid on legal
fees and office
rent?

Legal fees paid: Taxpayer is

AED 10,000 registered for VAT
+ 500 VAT purposes

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 Late payment penalties

Violation no. 9 of Table 1

The failure of the 1. The Taxable Person shall be obliged to pay the penalty applicable to late payment
Taxable Person to of Payable Tax up to a maximum of 300%, pursuant to the following:
settle the Payable
Tax stated in the a. 2% of the unpaid Tax shall be due on the day following the due date of
submitted Tax payment, where the settlement of Payable Tax is late.
Return or Voluntary b. 4% monthly penalty is due after one month from the due date of payment, and
Disclosure, or the on the same date monthly thereafter, on the unsettled Tax amount to date.
Tax Assessment he
was notified of, 2. For the purposes of this penalty, the late payment penalties shall be imposed on
within the timeframe the amount of unsettled tax as follows:
specified in the Tax
Law a. In the case of Voluntary Disclosure(s), on the first day following the 20th
business day from the submission date of the voluntary disclosure.
b. In the case of Tax Assessment, on the first day following the 20th business
day from the date of receipt of the tax assessment.

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 Violation 9 “Example”

• Company A failed to pay the VAT amount due for the tax period ending 30
December in 28 January, what are the penalties imposed in this case?

– A penalty of 2% will be imposed on late payment of amount due on 29 January on the amount not
paid to date

– In case an amount is still outstanding by 28 February, a penalty of 4% on the amount due will be
imposed

– 4% penalty will be imposed on any amount due every 28 of the month up to a maximum of 300%

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 Violation 9 “Example”

• Company A submits the voluntary disclosure on 15 August 2021, when shall

the additional tax be paid?

- The tax shall be paid within 20 business days, i.e. before 12

September 2021, otherwise late penalties of Violation 9
shall be imposed.

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 Penalties applicable if no VD filed

Violation no. 12 of Table 1

The failure of the Person/Taxpayer Without prejudice to the potential consequences of the penalty
to voluntarily disclose an error in mentioned in Clause 10 of this Table, the person will be
the Tax Return, Tax Assessment, subject to:
or refund application pursuant to
Article 10 (1) and 10(2) of the Tax 1. A penalty of 50% on the amount of error.
Procedures Law before being
notified by the Authority that it will 1. A penalty of 4% for every month or part of the month, of
be subject to a Tax Audit. the following:

a. The unpaid Tax to the Authority, from the date the

payment is due for the relevant Tax Period until the
date of receipt of the Tax Assessment.
b. The Tax that was not returned to the Authority due to
ineligible refund, from the date of Tax refund until
the date of receipt of the Tax Assessment.

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VAT Return/Tax Assessment – Error related to Input Tax
The value of the Correct the error in the current
error is not more VAT Return in which the error is No penalty
than AED 10,000 discovered **
Input tax and no refund filed
over claimed
The value of the
error is more than Possible
AED 10,000 or Voluntary disclosure
penalty
refund filed
Input Tax

Whether input tax

Input tax Claim the VAT credit in the VAT
credit to be claimed No penalty
under claimed Return in which the error is
is within 2 tax
discovered**
periods

Whether input tax

Refer Article credit to be claimed Possible
Voluntary disclosure penalty
55(2) of the UAE is beyond 2 tax
VAT Law periods

* Voluntary disclosure to be submitted within 20 business days of discovery of error.

***Unless there is not a VAT return through which the error can be corrected. In this case, a voluntary
disclosure must be submitted
PwC 85
VAT Return/Tax Assessment – Multiple Errors identified for
the same Tax period*

Net tax payable is more than Voluntary disclosure to the FTA in Form Possible
AED 10,000** 211 (mandatory) penalty

Net tax payable is less than Correct the error in the current VAT No
AED 10,000** Return in which the errors are discovered penalty

Voluntary disclosure (at the discretion of Possible

Net tax receivable**
the taxable person) penalty

* When multiple errors related to a given VAT return are identified during the same tax period (note : “same tax
period” is limited to a 20 business days window from the first error identified when the first error identified
results in an additional payable amount of VAT exceeding AED 10,000)

** Consolidated amount of errors identified for the same tax period; with the exception of errors related to input
VAT beyond 2 Tax periods (these errors will always be disclosed separately and cannot be netted with other
PwC
errors) 86
 Tax Evasion
Penalties

PwC
Introduction (type of) penalties

Penalties

Administrative Penalties Tax Evasion Penalties

Article 76 VAT Law

Article 25 Tax Procedures Law Article 77 VAT Law
Article 26 Tax Procedures Law
Cabinet Resolution No. (40) of
2017 on Administrative Penalties
for Violations of Tax Laws in Article 26 Tax Procedures Law
UAE
PwC 88
Tax Evasion Penalties (continued)

▪ Art. 1 Tax Procedures Law

Definition
Tax Evasion: The use of illegal means resulting in the reduction of the amount of
the Due Tax, nonpayment thereof, or a refund of a tax that a person does not
have the right to have refunded under any Tax Law.

PwC 89
Tax Evasion Penalties

▪ Art. 77 VAT Law

If it is proven that a Person who is not a Registrant acquires Goods referred to in

Clause (3) of Article 48 of this Decree-Law, claiming that he is a Registrant, he
shall be considered as having committed Tax Evasion and shall be subject to the
penalties provided for in Federal Law No. (7) of 2017 on Tax Procedures.

PwC 90
Tax Evasion Penalties – Article 26 Tax Procedures Law

PwC 91
Tax Evasion Penalties (continued)

▪ Art. 26 Tax Procedures Law

PwC 92
 Practice

PwC
THE AUTHORITY has serious grounds to believe that Hassan (a registered person) is
involved in tax evasion and they need to audit his place of business.

What are the most suitable steps that THE AUTHORITY can take in such a scenario?

A: THE AUTHORITY needs to issue a 5 days prior notice to access to premises

B: THE AUTHORITY may access the premises without any approval and temporarily close
it for maximum 72 hours

C: THE AUTHORITY may access the premises subject to approval from Director General
and temporarily close it for maximum 72 hours

D: THE AUTHORITY may access the premises subject to approval from Public Prosecutor
and temporarily close it for maximum 72 hours

PwC 94
THE AUTHORITY has serious grounds to believe that Hassan (a registered person) is
involved in tax evasion and they need to audit his place of business.

What are the most suitable steps that THE AUTHORITY can take in such a scenario?

A: THE AUTHORITY needs to issue a 5 days prior notice to access to premises

B: THE AUTHORITY may access the premises without any approval and temporarily close
it for maximum 72 hours

C: THE AUTHORITY may access the premises subject to approval from Director General
and temporarily close it for maximum 72 hours

D: THE AUTHORITY may access the premises subject to approval from Public Prosecutor
and temporarily close it for maximum 72 hours Practice – 1
C – article 17 TPL

PwC 95
While conducting a tax audit THE AUTHORITY may access and seize the following?

(i) Original Books of Accounts

(ii) Copies of Books of Accounts
(iii) Computers & Laptops
(iv) Stock in trade

A: All of the above

B: Only (ii) and (iv)
C: Only (ii)
D: None can be seized

PwC 96
While conducting a tax audit THE AUTHORITY may access and seize the following?

(i) Original Books of Accounts

(ii) Copies of Books of Accounts
(iii) Computers & Laptops
(iv) Stock in trade

A: All of the above

Practice – 2
B: Only (ii) and (iv)
C: Only (ii) Answer is A
D: None can be seized Article 18 TPL

PwC 97
Zafar University is an engineering college established in Abu Dhabi. During the summer
break students may enrol for an optional on field training to be conducted in Tanzania.

Zafar University also provides certificate based distance learning courses in blockchain
(automatically delivered over the internet). Students from all over the World except the UAE
have enrolled for this on field training and certificate course.

What is the VAT implication on providing the blockchain training?

A: Standard-rated supply
B: Zero-rated supply
C: Exempt supply
D: Outside the scope of supply

PwC 98
Zafar University is an engineering college established in Abu Dhabi. During the summer
break students may enrol for an optional on field training to be conducted in Tanzania.

Zafar University also provides certificate based distance learning courses in blockchain
(automatically delivered over the internet). Students from all over the World except the UAE
have enrolled for this on field training and certificate course.

What is the VAT implication on providing the blockchain training?

A: Standard-rated supply
B: Zero-rated supply
C: Exempt supply Practice – 3
D: Outside the scope of supply D
Article 31 VAT Law
Article 23 Regulations

PwC 99
 Game LLC operate an online game portal from the UAE for use by customers in the UAE,
Europe and Africa.

Where is the place of supply of Game LLC’s services according to the UAE’s VAT
Law?

A: Out of the scope of VAT altogether

B: Place of the customers’ establishment

C: Place of the suppliers’ establishment

D: Place of actual use or enjoyment of the games

PwC 100
 Game LLC operate an online game portal from the UAE for use by customers in the UAE,
Europe and Africa.

Where is the place of supply of Game LLC’s services according to the UAE’s VAT
Law?

A: Out of the scope of VAT altogether

B: Place of the customers’ establishment

Practice – 4
C: Place of the suppliers’ establishment D
Article 31 VAT Law
D: Place of actual use or enjoyment of the games

PwC 101
The distance selling rules apply to.............................................

Which of the following completes the sentence above?

A: sales to registered persons in other GCC states

B: sales to non-registered persons in other GCC states

C: sales to registered persons in non-GCC states

D: sales to non-registered persons in non-GCC states

PwC 102
The distance selling rules apply to.............................................

Which of the following completes the sentence above?

A: sales to registered persons in other GCC states

B: sales to non-registered persons in other GCC states

C: sales to registered persons in non-GCC states

D: sales to non-registered persons in non-GCC states Practice – 5

B

PwC 103
PwC 104
 Practice – 7
A

PwC 105
 Treat amount as
VAT exclusive!

PwC 106
 Practice – 9
D – 57,500

PwC 107
Question
A trader has submitted a VAT return for the tax period April 2021- June 2021 which shows output tax
of AED 570,000 and input tax of AED 125,000.

It later transpires, prior to a VAT audit, that the correct position is output tax of AED 770,000 and input
tax of AED 225,000. The trader files a voluntary disclosure on 31 August 2022.

Which of the following is the maximum amount of penalty due by the trader to THE AUTHORITY, on
the assumption that this is the trader’s first offence?

A: AED 11,000

B: AED 10,000

C: AED 1,000

D: AED 6,000

PwC 108
Question
A trader has submitted a VAT return for the tax period April 2021- June 2021 which shows output tax
of AED 570,000 and input tax of AED 125,000.

It later transpires, prior to a VAT audit, that the correct position is output tax of AED 770,000 and input
tax of AED 225,000. The trader files a voluntary disclosure on 31 August 2022.

Which of the following is the maximum amount of penalty due by the trader to THE AUTHORITY, on
the assumption that this is the trader’s first offence?

A: AED 11,000
A- [1000 + 10%
of difference]
B: AED 10,000

C: AED 1,000

D: AED 6,000

PwC 109
Question
JKL LLC carries out solely taxable supplies and has full recoverability of all its expenses. In the VAT
return for the period ending 31 July 2021 management concealed an error resulting in an increased
total expenses exclusive of VAT within their VAT return by AED 200,000.

After hearing about the penalties incurred by another business doing this they decided to come clean
and disclose the error to THE AUTHORITY on 1 September 2021 . This is a recurring offence for JKL LLC.

What is the penalty the company is likely to suffer due to this error?

A: AED 1,500

B: AED 2,000

C: AED 2,500

D: AED 500

PwC 110
Question
JKL LLC carries out solely taxable supplies and has full recoverability of all its expenses. In the VAT
return for the period ending 31 July 2021 management concealed an error resulting in an increased
total expenses exclusive of VAT within their VAT return by AED 200,000.

After hearing about the penalties incurred by another business doing this they decided to come clean
and disclose the error to THE AUTHORITY on 1 September 2021 . This is a recurring offence for JKL LLC.

What is the penalty the company is likely to suffer due to this error?

A: AED 1,500
C- [2,000 +
B: AED 2,000 (200,000*5%)*5%]

C: AED 2,500

D: AED 500

PwC 111
 UAE VAT Compliance Diploma
Module C - Chapter 17: Refunds

PwC
Agenda

UAE VAT Compliance Diploma

▪ Refund of VAT for Building New Residences
▪ Refunds for Business Visitors
▪ Refunds for Tourists
▪ Refunds for Foreign Governments
▪ Refund of VAT shown on a Tax Return
▪ Refunds for Exhibition and Conference Supplies (home reading)
▪ Refund of VAT Paid on Goods and Services Connected with Expo 2020 Dubai
(home reading)

PwC 113
 Refunds

PwC
Refunds
▪ Art. 75 Law – Tax recovery in special cases

The Authority may according to the conditions, restrictions and procedures specified in the Executive
Regulations of this Decree-Law, return Tax paid for any supply received by or Import carried out by
anyone of the following:
1. A citizen of the State in respect of the Goods and Services related to the construction of a new
residence that is not part of the Person’s Business – Article 66 of the Regulations (building new
residence for UAE citizens)
2. A Non-Resident, who is not a Resident of an Implementing State and conducts a Business and is not
a Taxable Person - Article 67 of the Regulations (Business Visitor Refund Scheme)
3. A Non-Resident, for Goods supplied to him in the State and that will be exported - Article 68 of the
Regulations (Tourist Refund Scheme)
4. Foreign governments, international organisations, diplomatic bodies and missions according to
treaties that the State is a party to - Article 69 of the Regulations (Refund for foreign governments)
5. Any Persons or classes listed in a Cabinet Decision issued at the suggestion of the Minister
PwC 115
 Refund of VAT for
Building New Residences

PwC
VAT Guide on FTA website

The details of this refund scheme

are explained in the VAT Guide
25 pages
General information and conditions
in the VAT and Regulations.

PwC 117
VAT Refund for Building New Residences by UAE Nationals -
Introduction
Article 66(1)
Who? of the UAE
VAT
Regulations
Where a UAE National owns or acquires land
in the UAE on which they build or commission
the construction of his/her own residence

He/she shall be entitled to make a claim to the

FTA to refund the VAT on the expenses
incurred on the construction of the residence

Article 75(1) VAT Law / Article 66 Regulations

PwC 118
What is claimable?

▪ Art. 66(6) Regulations

▪ Services provided by contractors, including services of builders,

architects, engineers, and other similar services necessary for the
successful construction of residence.

▪ Building materials, being goods of a type normally incorporated by

builders in a residential building or its site, but not including furniture or
electrical appliances.

PwC 119
Eligible and not eligible Goods

VAT is recoverable:
▪ Central air conditioning and split units ▪ Sanitary units
▪ Doors ▪ Shower units
▪ Fire alarms and smoke detectors ▪ Window frames and glazing
▪ Flooring (excluding carpets) ▪ Wiring when embedded inside the
▪ Kitchen sinks, work surfaces and structure of the building
fitted cupboards

No VAT is recoverable:
▪ Removable appliances ▪ Landscaping, such as trees, grass and
▪ Furniture such as sofas, tables, plants
chairs etc. ▪ Swimming pools

PwC 120
Conditions for Making A Claim

Conditions (clauses 2-4 of Article 66 of the Regulations)

▪ The claim may only be made by a natural Person who is a national of the
State.
▪ The expenses incurred must relate to a newly constructed building which
is to be used solely as a residence by the applicant and/or his or her family
▪ The expenses must relate to certain goods and services provided by
contractors and building materials
▪ The Refund Form must be sent to the FTA within 12 months from the date
of completion (i.e. becomes occupied or certified as being completed,
whichever is the earliest)
PwC 121
New Residence - Legal Framework (continued)

▪ Art. 66(2)(c) Regulations

c. The claim may not be made in connection with a building that will not
be used solely as a residence by the Person or the Person’s family, for
example if it is to be used as a hotel, guest house, hospital or for
any other purpose not consistent with it being used as a residence

PwC 122
Time- limit for VAT refund claim

▪ Art. 66(3) Regulations

The refund claim must be lodged within 12 months from the date of
completion of the newly built residence, which is the earlier of:

▪ the date the residence becomes occupied, or

▪ the date when it is certified as completed by a competent authority in
the UAE

PwC 123
Exceptions to the time-limitation From the
VAT Guide

PwC 124
 Refunds for
Business Visitors

PwC
VAT Refund for Business Visitors - Example

PwC 126
VAT Refund for Business Visitors - Guide

20 pages

PwC 127
VAT Refund for Business Visitors - Legal Basis

▪ Article 75(2) VAT Law:

‘The Authority may according to the conditions, restrictions and procedures

specified in the Executive Regulation of this Decree-Law, return Tax paid for any
supply received by or Import carried out by any of the following:

(2) A Non-Resident, who is not a Resident of an Implementing State and

conducts a Business and is not a Taxable Person.’

PwC 128
VAT Refund for Business Visitors - Legal Basis (continued)

▪ Article 67(1) Regulations:

‘The Authority shall implement a Businesses VAT Refund Scheme for Foreign
Businesses to allow the repayment of Tax on expenses incurred in the State by
a foreign entity which has no Place of Establishment or Fixed Establishment in
the State or the Implementing State, and is not a Taxable Person.’

VAT refund for business visitors!

PwC 129
 Summary of
VAT Refund for Business Visitors - Conditions Article 67
VAT ER

▪ No place of establishment or fixed establishment in the UAE or the Implementing

State
▪ Not a Taxable Person in the UAE;
▪ Not carrying on Business in the UAE;
▪ Carrying on a Business and being registered as an establishment with a competent
authority in the jurisdiction in which they are established;
▪ From a country that has a Value Added Tax and which also provides refunds of VAT
to UAE entities in similar circumstances – Principle of reciprocity
▪ The period of each Refund claim shall be 12 calendar months (except in the case of
applicants resident in GCC states which are not Implementing States);
▪ The minimum amount of VAT for which a claim may be submitted under this scheme
shall be AED 2,000.
PwC 130
VAT Refund for Business Visitors

Who cannot claim refund?

A refund is not available if any of the following applies:

▪ The foreign Business makes supplies in the UAE (unless the recipient is
obliged to account for VAT under reverse charge mechanism);
▪ If the Input Tax relates to Goods or Services for which the Tax is not
recoverable in accordance with Article 53 of this Decision.
▪ If the foreign entity is from a country that does not in similar circumstances
provide refunds of value added tax to entities that belong to the State
(Reciprocity Principle); or
▪ The Foreign Business is a non-resident tour operator
PwC 131
VAT Refund for Business Visitors - List of Approved Countries

Updated in
April 2021

PwC 132
Overview Business Refund Scheme

Refunds
application date
Refund claim period: calendar year

Minimum claim
1st Jan 2021 AED 2,000 31st Dec 2021 1st Mar 2022

6 months time as of
1st of March before
1st of September 2022

PwC
 Refunds for
Tourists

PwC
Tourist Refund Scheme (TRS)
SUMMARY

What is the Tourist Refund Scheme?

UAE

PwC 135
Tourist Refund Scheme (TRS) (continued)

Legal basis:

1. Article 68 Executive Regulations

2. Cabinet Decision no. (41) of 2018 on introducing the Tax Refund scheme
3. Federal Tax Authority Decision No. (1) of 2018 on the Requirements for
Retailers to participate in the Value Added Tax Refund for Tourist Scheme
(TRS)
4. Federal Tax Authority Decision No. (2) of 2018 on Tax Refunds for Tourist
Scheme
5. Federal Tax Authority Decision No. (1) of 2019 On the Maximum Amount of
Cash Refund under the Tax Refunds for Tourists Scheme
PwC 136
Tourist Refund Scheme (TRS) (continued)

Actors of the Tourist Refund Scheme

1. The Tourist 2. The Retailer

3. The Operator of the Scheme

PwC 137
Tourist Refund Scheme (TRS) (continued)

1. The Overseas Tourist

▪ Any natural Person

▪ Not resident in the UAE or other Implementing State
Not a crew member on a flight or cruise
Leaving the UAE to outside the Implementing State (rest of the world)
via air / sea or land port

PwC 138
Tourist Refund Scheme (TRS) (continued)

2. The Retailer

▪ Be registered with the Federal Tax Auhority and hold a valid

TRN number for VAT purposes;
▪ Be a seller of goods that are not excluded from refund
(article 6 Decision no. 2)– see next slide;
▪ Submit an application to join the scheme as determined by the FTA and be
subject to a credit check by the Operator;
▪ Regularly submit VAT returns and settle payable tax to the FTA;

PwC 139
Excluded Goods

The following Goods shall be excluded from the Tax Refunds for
Tourists Scheme:
1. Goods that are not accompanied by the Overseas Tourist at the time
of leaving the State.
2. Goods that have been consumed, in full or in part, in the State or any
other Implementing State.
3. Motor vehicles, boats and aircrafts.

PwC 140
Tourist Refund Scheme (TRS) (continued)

3. The Operator authorized by the FTA

▪ The operator shall be permitted to charge fees to the overseas

tourist for the administration of the refund under the scheme;
▪ The operator may deduct the fees from the amount to be
refunded to the overseas tourist;
▪ The operator shall be required to collaborate with Customs department in the
State in cases where the Overseas Tourist is required to present any Goods
on which he is claiming a refund and which may require validation and
inspection

PwC 141
Tourist Refund Scheme (TRS) (continued)

AED 100 VAT

AED 100 minus charged fees to

Purchase of product the tourist (15% admin fee plus
AED 2100 (2000 + 100 VAT) fixed fee of AED 4.8)= AED 80.2
total refund

PwC 142
Tourist Refund Scheme - Calculation Refund (continued)

Federal Tax Authority Decision No. (2) of 2018 On Tax Refunds for Tourists
Scheme

Article (4)
Fees and Refund
3. The cash VAT refund shall be limited to a maximum of AED 10,000 per
overseas tourist per 24 hours

PwC 143
Minimum Purchase Value
Federal Tax Authority Decision No. (2) of 2018 On Tax Refunds for
Tourists Scheme

Article (5)
Minimum Purchase Value
Tax shall not be refunded under the Scheme in respect of any claim
where the value of Tax inclusive purchases from the same Taxable
Person from whom the Overseas Tourist requests a refund, is not AED
250 or more

PwC 144
VAT return

PwC 145
Tourist Refund Scheme (TRS) (continued)

Question:

Hans a tourist from the Netherlands buys the following goods from the VAT
registered business: Phones and Chocolate Company:
▪ Iphone AED 5,250 (inclusive of VAT)
▪ 5 chocolate boxes for AED 105 per box (inclusive of VAT) (1 box is consumed
by the son of Hans in Dubai before leaving the UAE)

Calculate the VAT refund of Hans when leaving the UAE

PwC 146
 Refunds for
Foreign Governments

PwC
Refunds for Foreign Governments

▪ Art. 69 Regulations

1. Where Tax is incurred by foreign governments, international organisations,

diplomatic bodies and missions, or by an official thereof, the foreign governments,
international organisations, diplomatic bodies and missions may submit a claim on a
form issued by the Authority requesting repayment of the Tax charged.
2. The application of Clause (1) of this Article is subject to the following conditions:
a. Goods and Services are acquired exclusively for official use
b. The country in which the relevant foreign government, international
organisation, diplomatic body or mission is established or has its official seat
excludes the same type of entities that belong to the State from the burden of
any Tax in that country (condition of reciprocity)

PwC 148
Refunds for Foreign Governments (continued)

▪ Art. 69 Regulations

c. The refund claim is consistent with the terms of any international treaty or
other agreement concerning the liability to tax of such a foreign
government, international organisation, diplomatic body or mission
d. The official of a foreign government, international organisation, diplomatic
body or mission who benefits from the refund should not hold UAE
Nationality or have a residence visa under the sponsorship of an entity
other than the foreign government, international organisation, diplomatic
body or mission itself, and should not carry out any Business in the State

PwC 149
 Refund of VAT shown
on A Tax Return

PwC
Refund of VAT shown on A Tax Return

▪ Art. 74 VAT Law

1. With the exception of what will be stipulated in the Executive Regulation of this
Decree-Law, the Taxable Person shall carry forward any excess of Recoverable Tax
to the subsequent Tax Periods and offset such excess against Payable Tax or any
Administrative Penalties imposed under this Decree-Law or Federal Law No. (7) of
2017 on Tax Procedures in subsequent Tax Periods until such excess is fully
utilised, in the following cases:
a. If the Taxable Person’s Recoverable Input Tax set forth in this Decree-Law
exceeds the Output Tax payable for the same Tax Period
b. If the Tax paid to the Authority by the Taxable Person exceeds the Payable
Tax according to the provisions of this Decree-Law, other than in the instance
mentioned in paragraph (a) of Clause (1) of this Article
PwC 151
Refund of VAT shown on A Tax Return (continued)

▪ Art. 74 VAT Law

2. If there remains any excess for any Tax Period after being carried forward for a
period of time, the Taxable Person may apply to the Authority to reclaim the remaining
excess. The Executive Regulation of this Decree-Law shall specify the time limits,
procedures and mechanisms of returning any remaining excess to the Taxable Person.

PwC 152
Refund of VAT shown on A Tax Return (continued)

▪ Art. 34 Tax Procedures Law – Application for Tax Refund

A Taxpayer may apply for a refund of any Tax he has paid if he is entitled to a refund
under the Tax Law and it appears that the amount he has paid is in excess of the
Payable Tax and Administrative Penalties, pursuant to the procedures specified in the
Executive Regulation of this Law.

PwC 153
Refund of VAT shown on A Tax Return (continued)

▪ Art. 35 Tax Procedures Law – Tax Refund Procedures

1. The Authority shall offset the amount applied to be returned against any other
Payable Tax or Administrative Penalties due from the Taxpayer who has applied for
the refund pursuant to the Tax Return or Tax Assessment issued by the Authority
before refunding any amount relating to a particular tax.
2. The Authority may decline to refund the amounts mentioned in Clause (1) of this
Article if it finds that there are other disputed Tax amounts that are due in relation to
that Person or according to a decision of the Competent Court.
3. The Authority shall issue a Tax refund under this Article pursuant to the procedures
and provisions specified in the Executive Regulation of this Law.
→ Art. 22 Executive Regulation on Tax Procedures: Procedures of Getting a
Tax Refund
PwC 154
Refund of VAT shown on A Tax Return (continued)

▪ Art. 22 Executive Regulation on Tax Procedures – Procedures of Getting a Tax

Refund

1. Subject to any further conditions specified in the Tax Law, a Taxpayer shall apply for
a refund as per the mechanism specified by the Authority.
2. The Authority shall, within (20) business days of an application being
submitted, review the application and notify said Taxpayer of accepting or rejecting
the refund claim. Where the Authority has reasonable grounds for requiring a period
longer than (20) business days to consider his application, it shall notify the relevant
Taxpayer thereof.

PwC 155
Refund of VAT shown on A Tax Return (continued)

▪ Art. 22 Executive Regulation on Tax Procedures – Procedures of Getting a Tax

Refund

3. Where the Authority has approved a refund application in accordance with Clause
(2) of this Article, it shall, within (5) business days of the approval, either make the
appropriate payment to the Person or notify the Person that the Authority will
offset the amount requested to be refunded against any other Payable Tax or
Administrative Penalties due, or to notify the Person that the refund will be
postponed until all due Tax Returns are submitted to the Authority; any amount in
excess of such liability shall be refundable in conformity with the conditions
contained in the Tax Law .
4. The payment of a refund amount shall be made to the Person entitled to the refund
by the means acceptable to the Authority.
PwC 156
Practise Question

In which of the below mentioned cases will a special refund not be granted?

A: A UAE national owns land in the UAE and applies for a VAT refund on residence
construction expenses.

B: A tourist applying for tourist refund on goods purchased and exported within 20 days

C: A VAT refund by a diplomatic body according to state treaty

D: A person who is a residence in the KSA having no presence in the UAE applies for a
business refund

PwC 157
 Refunds for Exhibition
& Conference Supplies

PwC
Refund of VAT Paid on Services Provided in Exhibitions and
Conferences

▪ Legal basis: Article 75(5) VAT Law: Tax Recovery in Special Cases
‘The Authority may according to the conditions, restrictions and procedures specified in
the Executive Regulation of this Decree-Law, return Tax paid for any supply received by
or Import carried out by any of the following:
(5) Any Persons or classes listed in a Cabinet Decision issued at the suggestion of the
Minister.’

Cabinet Decision no. 26 of 2018 on the Refund of Value Added Tax Paid on
Services provided in Exhibitions and Conferences

User guide for supplier and recipients of exhibition and conference services (23
pages)
PwC 159
Refund of VAT Paid on Services Provided in Exhibitions and
Conferences (continued)
Invoice 100+5 VAT

Services
Supplier of Exhibition Recipient
and Conference Services (international customer)
Payment of only 100
▪ The supplier is issuing an invoice adding VAT but is not collecting the VAT mentioned on the
invoice.
▪ The supplier should report the VAT mentioned as output VAT in the VAT return
▪ The supplier can request the refund of VAT charged in the VAT return (same Tax Period in which
the Date of supply was triggered)
▪ Maximum event period- 7 days.
▪ Supplier to fill-in a licensing form and submit to the FTA along with required documents.
PwC 160
How to report VAT refunds in the VAT return

Use
Adjustment
column

PwC 161
 Refund of VAT Paid on
Goods and Services
Connected with
EXPO 2020 Dubai

PwC
EXPO Refund - What is The Issue?

Typically, a person may only recover VAT incurred in the UAE on Goods
and Services where these are used or intended to be used for making
taxable supplies.

Main rule: incurred VAT on expenses do not relate to any taxable supplies made
by the person? VAT is not recoverable!

Exception: for Official Participants of the Expo 2020 (subject to conditions).

PwC 163
 UAE VAT Compliance Diploma
Module C - Chapter 18: International
Aspects Goods

PwC
Disclaimer

"This publication has been prepared for general guidance on matters of interest only,
and does not constitute professional advice. The information contained within this
publication will be based on the law, regulations and guidance applying at the date the
publication is produced. We will not monitor or be responsible for the effects of any
subsequent changes in law, regulations or guidance.

You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given
as to the accuracy or completeness of the information contained in this publication, and,
to the extent permitted by law, PricewaterhouseCoopers (Dubai Branch), its members,
employees and agents do not accept or assume any liability, responsibility or duty of
care for any consequences of you or anyone else acting, or refraining to act, in reliance
on the information contained in this publication or for any decision based on it."
PwC 165
Agenda

UAE VAT Compliance Diploma

▪ Place of supply for Goods
▪ Distance selling
▪ Place of supply of Water and Energy
▪ Imports
▪ Reverse charge mechanism

PwC 166
GCC Implementing States for exam purposes

For exam purposes

▪ UAE/KSA & Bahrain → Implementing States for exam purposes.

Supplies to these countries treated as intra-GCC supplies

▪ Kuwait/Oman & Qatar → No implementing States for exam purposes

Supplies to these countries treated as export

Transitional Rules

But currently, (in real life) UAE/KSA and Bahrain do not recognize each other as
‘’implementing states’’ yet. Therefore the export rules also apply to supplies from
the UAE to KSA and Bahrain.

PwC 167
 Why is it important to
know the Place of
Supply?

168
PwC
Introduction – Place of Supply

▪ What is the place of supply?

The place of supply is where a transaction is considered to

have occurred for VAT purposes.

It determines whether tax is applicable on the supply or not.

PwC 169
 Why is it important to know the Place of
Supply?

Place of Supply outside UAE:

Place of Supply in UAE:
UAE VAT Not Applicable
UAE VAT Applicable
(Out of Scope Supply)

DOES NOT determine VAT rate!!!

PwC
Introduction

Place of Supply Rules

Services
Goods
Article 29 VAT Law
Article 27 VAT Law
Article 30 VAT Law
Article 28 VAT Law
Article 31 VAT Law

We will start with Place of Place of Supply rules for

Supply rules for Goods – Services will be discussed
chapter 18 in chapter 19
PwC 171
 Place of Supply
for Goods

PwC
Place of Supply Rules – Goods

Place of Supply Rules

Services
Goods
Article 29 VAT Law
Article 27 VAT Law
Article 30 VAT Law
Article 28 VAT Law
Article 31 VAT Law

PwC 173
Place of Supply for Goods - terminology

▪ Art. 1 VAT Law

Import: The arrival of Goods from abroad into the State or receipt of Services from
outside the State.
Export: Goods departing the State or the provision of Services to a Person whose Place
of Establishment or Fixed Establishment is outside the State.

PwC 174
Place of Supply for Goods
▪ Art. 27(1) VAT Law

Supplier Customer

Supply made in the UAE Place of

supply UAE!

PwC 175
Example

UAE UAE
Supplier Customer Place of
Supplier and Customer
supply is
UAE!

Out of
France Germany Movement of goods Scope!
Movement of Goods!

Goods go from France to Germany directly

We follow the goods!
PwC 176
One More Example

German Italian
Supplier Place of supply
Customer Supplier and Customer
is UAE!

Goods
Subject to UAE
VAT rules
Goods in warehouse in Movement of goods
Dubai
Ownership transfer from German Supplier VAT rate can be
To Italian Customer, but no movement in goods 5% or 0% if it is
Goods were in Dubai and is still in Dubai a good that is
subject to 0%
VAT
PwC 177
Place of Supply Rules for Goods

Follow the goods……………

PwC 178
Place of Supply for Goods
▪ Art. 27 Law

Place of supply
where the assembly
or installation takes
Supplier place

In UAE? POS is UAE

Outside UAE? POS
is outside UAE
PwC 179
Example – supply of goods with installation

UAE Supplier UK customer

Goods go from the UAE to UK.

Agreement to deliver the goods
AND to do the installation

PwC 180
 Article 27-3
VAT Law

0% or 5%

POS is in
the UAE

POS is
outside
the UAE

PwC 181
 Place of Supply is INSIDE the state (UAE) (27-3-a) VAT LAw
1 Supplies Outside example UK individual
UAE Supplier Implementing
goods to
States example UK Reg. Business
POS is VAT Rate In VAT
UAE 0% return

2 Another KSA individual/

Supplies example
UAE Supplier Not registered recipient DS
goods to Implementing State

Total exports from the same supplier to KSA is below the Mandatory registration Threshold of KSA (SAR 375k)

POS is VAT Rate In VAT

UAE 5% return

3
KSA Supplier UAE individual/
Supplies goods to
Not registered recipient
DS
Total exports from the same supplier in an implementing state to UAE is exceeding the
Mandatory registration Threshold of the UAE (AED 375k)
POS is VAT Rate In VAT
PwC UAE 5% return 182
 Place of Supply is Outside the state (UAE) (27-3-b) VAT Law
Registered Example KSA
1 customer in Reg. Business
UAE Supplier Supplies goods to
Implementing
States
POS is outside
the UAE

2
2 Supplies Another KSA individual/
UAE Supplier example Not registered person DS
goods to Implementing State

Total exports from the same supplier to KSA is above the Mandatory registration
Threshold of KSA (SAR 375k)
POS is outside
the UAE

3 KSA Supplier UAE individual/

Supplies goods to
Not registered person
DS
Total exports from the same supplier in an implementing state to UAE is below the Mandatory
registration Threshold of the UAE (AED 375k)

PwC
Practice question - 1
Questions

POS?

Supplies German registered

UAE Supplier
goods to business
VAT Rate?

In VAT
return?

Which
article?

PwC 184
Answer question - 1
Questions

POS?

Supplies German registered

UAE Supplier
goods to business
VAT Rate?

In VAT
return?

Which
article?

POS? UAE / VAT rate? 0% / VAT return? Yes / Article 27-3-A-1 VAT Law

PwC 185
Practice question - 2
Questions

POS?
French non
UAE Supplier Supplies registered
goods to individual person VAT Rate?

In VAT
return?

Which
article?

PwC 186
Answer question - 2
Questions

POS?
French non
UAE Supplier Supplies registered
goods to individual person VAT Rate?

In VAT
return?

Which
article?

POS? UAE / VAT rate? 0% / VAT return? Yes / Article 27-3-A-1 VAT Law

PwC 187
Practice question - 3
Questions

POS?

Supplies Bahrain Registered

UAE Supplier
goods to Customer
VAT Rate?

In VAT
return?

Which
article?

PwC 188
Answer question - 3
Questions

POS?

Supplies Bahrain Registered

UAE Supplier
goods to Customer
VAT Rate?

In VAT
return?

Which
article?

POS? Not UAE (Bahrain) / VAT rate? NA / VAT return? No / Article 27-3-
B-1 VAT Law

PwC 189
Practice question - 4
Questions

POS?
Italy individual
UAE Supplier Supplies person not
goods to registered for tax VAT Rate?

In VAT
return?

Which
article?

PwC 190
Answer question - 4
Questions

POS?
Italy individual
UAE Supplier Supplies person not
goods to registered for tax VAT Rate?

In VAT
return?

Which
article?

POS? UAE / VAT rate? 0% / VAT return? Yes / Article 27-3-A-1 VAT Law

PwC 191
Practice question - 5
Questions

POS?
Bahrain individual
UAE Supplier Supplies person not
goods to registered for tax VAT Rate?

Background
In VAT
• Supplier supplies goods worth 10,000 AED return?
• This is the first supply to customers in
Bahrain since the start of the year Which
article?

PwC 192
Answer question - 5
Questions

POS?
Bahrain individual
UAE Supplier Supplies person not
goods to registered for tax VAT Rate?

Background
In VAT
• Supplier supplies goods worth 10,000 AED return?
• This is the first supply to customers in
Bahrain since the start of the year Which
article?

POS? UAE because below the mandatory threshold in Bahrain/ VAT

rate? 5% / VAT return? Yes (probably change in VAT return) / Article 27-
3-A-2 VAT Law

PwC 193
Practice question - 6
Questions

POS?
UAE individual
KSA Supplier Supplies person not
goods to registered for tax VAT Rate?

Background
In VAT
• Supplier supplies goods worth 20,000 AED to UAE individual return?
person not registered for tax
• This is the first supply of the KSA supplier to customers in the Which
UAE since the start of the year. Supplier is below the UAE article?
Registration Threshold

PwC 194
Answer question - 6
Questions

POS?
UAE individual
KSA Supplier Supplies person not
goods to registered for tax VAT Rate?

Background
In VAT
• Supplier supplies goods worth 20,000 AED to UAE individual return?
person not registered for tax
• This is the first supply of the KSA supplier to customers in the Which
UAE since the start of the year. Supplier is below the UAE article?
Registration Threshold

POS? Outside the UAE because below the mandatory threshold in the UAE/ VAT
rate? KSA issue NA / VAT return? KSA issue / Article 27-3-B-3 VAT Law
PwC 195
Practice question - 7
Questions

POS?
UAE individual
KSA Supplier Supplies person not
goods to registered for tax VAT Rate?

Background In VAT
return?
• Supplier supplies goods worth 30,000
AED to UAE individual person not
registered for tax Which
article?
• The KSA supplier exceeded the
Mandatory Registration Threshold in the
UAE already.

PwC 196
Answer question - 7
Questions

POS?
UAE individual
KSA Supplier Supplies person not
goods to registered for tax VAT Rate?

Background In VAT
return?
• Supplier supplies goods worth 30,000
AED to UAE individual person not
registered for tax Which
article?
• The KSA supplier exceeded the
Mandatory Registration Threshold in the
UAE already. POS? In the UAE/ VAT rate? 5%/ VAT return? Yes/ Article 27-3-A-3 VAT
Law
PwC 197
Practice question - 8
Questions

POS?
Bahrain individual
UAE Supplier Supplies person not
goods to registered for tax VAT Rate?

Background In VAT
return?
• Supplier supplies goods
worth 10,000 AED
Which
• The UAE supplier exceeded article?
the Mandatory Registration
Threshold in Bahrain
already.

PwC 198
Answer question - 8
Questions

POS?
Bahrain individual
UAE Supplier Supplies person not
goods to registered for tax VAT Rate?

Background In VAT
return?
• Supplier supplies goods
worth 10,000 AED
Which
• The UAE supplier exceeded article?
the Mandatory Registration
Threshold in Bahrain
already. POS? NOT UAE because the mandatory threshold in Bahrain is exceeded/
VAT rate? NA in UAE becausee OOS / VAT return? No (probably change in
VAT return) / Article 27-3-B-2 VAT Law
PwC 199
Practice question 9

The Distance Selling rules apply to.......................................................

▪ Which of the following completes the sentence above?

▪ A: sales to registered persons in other GCC Member States

▪ B: sales to non-registered persons in other GCC Member States

▪ C: sales to registered persons in non-GCC countries

▪ D: sales to non-registered persons in non-GCC countries

PwC 200
Practice question 9

The Distance Selling rules apply to.......................................................

▪ Which of the following completes the sentence above?

▪ A: sales to registered persons in other GCC Member States

▪ B: sales to non-registered persons in other GCC Member States

▪ C: sales to registered persons in non-GCC countries

▪ D: sales to non-registered persons in non-GCC countries

PwC 201
Practice question 10

▪ Which ONE of the following statements about export of goods is

true?

▪ A: Place of supply is outside the implementing state if the goods are

exported to outside the implementing state

▪ B: Place of supply is within the UAE if the goods are exported to

outside the implementing state

PwC 202
Practice question 10

▪ Which ONE of the following statements about export of goods is

true?

▪ A: Place of supply is outside the implementing state if the goods are

exported to outside the implementing state

▪ B: Place of supply is within the UAE if the goods are exported to

outside the implementing state

PwC 203
Place of Supply for Goods (continued)

▪ Art. 24 Regulations

Evidence for Certain Supplies Between the Implementing States

1. Where a Taxable Person makes a supply of Goods from the State to a
Person who has a Place of Residence in another Implementing State, and
the supply requires the Goods to be physically moved to that other
Implementing State, the Taxable Person shall retain official and commercial
evidence of Export of those Goods to that other Implementing State
2. The Authority may require a Taxable Person who make supplies of Goods or
Services to another Implementing State to collect, retain and provide any
evidential information other than required under Clause (1) of this Article, by
the means determined by the Authority
PwC 204
Place of Supply for Goods (continued)

▪ Art. 66 VAT Law

Document of Supplies to an Implementing States

Without prejudice to Article (65) of this Decree-Law, each Registrant who
supplies Goods or Services considered as supplied in any of the Implementing
States, shall provide the Recipient of Goods and Recipient of Services with a
document that includes all the information that must be included in the Tax
Invoice and any other information as specified in the Executive Regulation of this
Decree-Law, provided that this document is not labelled “Tax Invoice” and
does not include any Tax charged.

PwC 205
Place of Supply for Goods (continued)

▪ Art. 59 Regulations

Document of Supplies to an Implementing States

[Link] the supply of goods or service is considered as supplied to an
Implementing State, the taxable person must include the following additional
particulars in the document issued:
a. The tax registration number of the Recipient of goods or services
issued to him by the competent authority of the implementing state in
which the supply is treated as taking place
b. A statement identifying the supply as between the State and an
Implementing State
c. Any other information specified by the Authority
PwC 206
Place of Supply for Goods - Summary (continued)

Are the goods transported from UAE to a location outside the UAE?

Yes No UAE

Transported from UAE to a location outside the Implementing states?

UAE Yes No
Exports > Mandatory
Zero Rated Implemen
registration threshold in ting State
Implementing State B2B B2C other Implementing State

Reverse charge
Exports < Mandatory
registration threshold in UAE
PwC
other Implementing State 207
Place of Supply - Supply of Water and Energy

▪ Art. 28 Law

Place of Supply of Water and Energy

1. The supply of water and all forms of energy specified in the Executive
Regulation of this Decree-Law through a distribution system, shall be considered
as done in the Place of Residence of the Taxable Trader in case the distribution
was conducted by a Taxable Person having a Place of Residence in the State to
a Taxable Trader having a Place of Residence in an Implementing State
2. The supply of water and all forms of energy specified in the Executive
Regulation of this Decree-Law through a distribution system, shall be considered
to have occurred at the place of actual consumption, if distribution was
conducted by a Taxable Person to a Non-Taxable Person
PwC 208
Place of Supply - Supply of Water and Energy (continued)

Supplier Customer VAT Place of

(UAE) registered (KSA) supply KSA

Taxable
Trader

The supply of water and all forms of energy through a distribution system, takes
place in the Place of Residence of the Taxable Trader in case the distribution
is provided:
by a Taxable Person having a Place of Residence in UAE to a Taxable Trader
having a Place of Residence in an Implementing State.
PwC 209
Place of Supply - Supply of Water and Energy (continued)

Place of supply
Customer Non-
Supplier
VAT registered
is place of actual
consumption

The supply of water and all forms of energy through a distribution system, takes
place at the place of actual consumption, if the distribution is provided by:
A Taxable Person to a Non-Taxable Person

PwC 210
Practice

PwC 211
Practice - answers

PwC 212
 Inports

PwC
Imports

Value of import
discussed in previous
chapters – article 35
VAT Law

PwC 214
Import of goods – example
According to article 2 of the VAT
Law – Import falls within the scope
Netherlands of tax

Option 1 – pay at the customs

& claim if you are entitled (via VAT
return)

Option 2 – deferring to VAT Return

UAE
(accounting for it and claiming it if
you are entitled)

PwC 215
Article 48 Regulations

PwC 216
Importation of goods by agents on behalf of VAT registered persons

PwC 217
Thank you

[Link]/me

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see [Link]/structure for further
details.

© 2021 PwC. All rights reserved

Appendix

[Link]/me
Import of goods through an agent (Option 1)
ABC LLC imports certain goods on behalf of PQR Co. During the tax period November 2020, ABC LLC has the following
import of goods:

Customs value of Import for own business: AED 200,000

Customs value of Import as an agent on behalf of PQR Co.: AED 100,000.

Return of ABC LLC Return of PQR Co

Box Amount VAT Box Amount VAT

No. AED Amount No. AED Amount
AED AED
VAT on Sales and all other Outputs VAT on Sales and all other Outputs
6 Goods imported into the UAE 300,000 15,000 6 Goods imported into the UAE 0 0
7 Adjustments and additions to (100,000) (5,000) 7 Adjustments and additions to 100,000 5,000
goods imported into the UAE goods imported into the UAE
VAT on Expenses and all other Inputs VAT on Expenses and all other Inputs
9 Standard rated expenses 9 Standard rated expenses
10 Supplies subject to the 200,000 10,000 10 Supplies subject to the reverse 100,000 5,000
reverse charge provisions charge provisions

PwC 220
Import of goods through an agent (Option 2)
ABC LLC imports certain goods on behalf of PQR Co. During the tax period November 2020, ABC LLC has the following import of
goods:

Customs value of Import for own business: AED 200,000

Customs value of Import as an agent on behalf of PQR Co.: AED 100,000. ABC LLC issues a statement to PQR for such imports.

Return of ABC LLC Return of PQR Co

Box Amount VAT Box Amount VAT

No. AED Amount No. AED Amount
AED AED
VAT on Sales and all other Outputs VAT on Sales and all other Outputs
6 Goods imported into the UAE 300,000 15,000 6 Goods imported into the UAE
7 Adjustments and additions to 7 Adjustments and additions to
goods imported into the UAE goods imported into the UAE
VAT on Expenses and all other Inputs VAT on Expenses and all other Inputs
9 Standard rated expenses 9 Standard rated expenses 100,000 5,000
10 Supplies subject to the reverse 200,000 10,000 10 Supplies subject to the reverse
charge provisions charge provisions

PwC 221
Import of goods through an agent
VAT Public Clarification (VATP012) – Importation of goods by agents on behalf of VAT registered persons
Option 1 Option 2

PwC 222
Import of goods through an agent
ABC LLC imports certain goods on behalf of PQR Co. During the tax period November 2020, ABC LLC has the following
import of goods:

Customs value of Import for own business: AED 200,000

Customs value of Import as an agent on behalf of PQR Co.: AED 100,000.

Return of ABC LLC Return of PQR Co

Box Amount VAT Box Amount VAT

No. AED Amount No. AED Amount
AED AED
VAT on Sales and all other Outputs VAT on Sales and all other Outputs
6 Goods imported into the UAE 300,000 15,000 6 Goods imported into the UAE
7 Adjustments and additions to 7 Adjustments and additions to
goods imported into the UAE goods imported into the UAE
VAT on Expenses and all other Inputs VAT on Expenses and all other Inputs
9 Standard rated expenses 9 Standard rated expenses 100,000 5,000
10 Supplies subject to the reverse 300,000 15,000 10 Supplies subject to the reverse
charge provisions charge provisions

PwC
 KSA- Registered
UAE POS is
business 27-3-B-1
KSA

Bahrain Individual not

UAE registered – below POS is
Bahrain Threshold 27-3-A-2
UAE

Bahrain Individual not

UAE registered – Exceed POS is
27-3-B-2
Bahrain Threshold Bahrain

POS is UAE –
Bahrain or KSA UAE individual / not
because threshold
registered person
exeeded

PwC 224
 UAE VAT Compliance Diploma
Module C - Chapter 19: International
Aspects Services

PwC
GCC Implementing States for exam purposes

For exam purposes

▪ UAE/KSA & Bahrain → Implementing States for exam purposes.

Supplies to these countries treated as intra-GCC supplies

▪ Kuwait/Oman & Qatar → Not implementing States for exam purposes

Supplies to these countries treated as export
Transitional Rules

But currently, (in real life) UAE/KSA and Bahrain do not recognize each other as
‘’implementing states’’ yet. Therefore the export rules also apply to supplies from
the UAE to KSA and Bahrain.

PwC 226
Disclaimer

"This publication has been prepared for general guidance on matters of interest only,
and does not constitute professional advice. The information contained within this
publication will be based on the law, regulations and guidance applying at the date the
publication is produced. We will not monitor or be responsible for the effects of any
subsequent changes in law, regulations or guidance.

You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given
as to the accuracy or completeness of the information contained in this publication, and,
to the extent permitted by law, PricewaterhouseCoopers (Dubai Branch), its members,
employees and agents do not accept or assume any liability, responsibility or duty of
care for any consequences of you or anyone else acting, or refraining to act, in reliance
on the information contained in this publication or for any decision based on it."
PwC 227
Agenda

UAE VAT Compliance Diploma

▪ Introduction
▪ General place of supply rules
▪ General exceptions
▪ Examples
▪ Reverse charge
▪ Reporting

PwC 228
 General Place of
Supply Rule

PwC
General Place of Supply Rule – Article 29 VAT Law

UAE
Registered What is the
UAE 1
Person Place of Supply
Registered
(POS?
Person 2 UAE
unregistered
3 person

French
registered This article
4
person does not talk
about the VAT
Italian Rate – only the
unregistered POS
person
230
PwC
General Place of Supply Rule – Article 29 VAT Law

UAE
Registered What is the
UAE 1
Person Place of Supply
Registered
(POS?
Person 2 UAE
unregistered
3 person

French
1- POS is UAE registered This article
4
2- POS is UAE person does not talk
3- POS is UAE about the VAT
4- POS is UAE Italian Rate – only the
unregistered POS
person
231
PwC
Place of Supply Rule for Implementing States – Article 30-1 VAT Law
(special rule)

KSA
Registered
UAE 1
Person What is the
Registered
Place of Supply
Person 2 Bahrain (POS?
Registered
Person
Question
What about Oman / Kuwait and Qatar?

232
PwC
Place of Supply Rule for Implementing States – Article 30-1 VAT Law
(special rule)

KSA What is the

Registered Place of Supply
UAE 1 (POS?
Person
Registered
Person 2 Bahrain
Registered
Person
Question
What about Oman / Kuwait and Qatar? 1. POS is KSA
2. POS is Bahrain

233
PwC
Practice example

Example

A UAE accountant provides professional services to:

a. A UAE non-taxable customer

UAE Accountant
b. A UAE taxable customer
c. A KSA non-taxable customer
d. A KSA taxable customer
e. A Maltese business

For each of the above, where would the Place of Supply be?

PwC 234
Practice example

Example

An UAE accountant provides professional services to:

a. A UAE non-taxable customer

UAE Accountant A- UAE
b. A UAE taxable customer B- UAE
c. A KSA non-taxable customer C- UAE
D- KSA
d. A KSA taxable customer E- UAE
e. A Maltese business

For each of the above, where would the Place of Supply be?

PwC 235
Article 30-2 VAT Law (special rule)

Business to What is the

Supplier Customer VAT
Place of Supply
(non-UAE) Business registered (UAE) (POS)?

PwC 236
Installation of Goods

Supplier

The place of supply of services related to goods

such as installation of goods supplied by
others, takes place where the service is
performed

PwC 237
Means of Transport

Lease of means Customer

Supplier of transport Non –VAT
(UAE) registered
(UAE)

If the supply is the lease of means of

transport to a non-taxable lessee in the
UAE who does not have a VAT
registration number in an implementing
state, the place of supply is where the
means of transport is placed at the
disposal of the lessee
PwC 238
Examples

UAE company French Customer

What is the
Place of Supply
(POS)?
UAE individual

Lease of car in Germany

UAE registered
business

KSA registered
business

KSA individual
PwC 239
Examples

UAE company French Customer

What is the
Place of Supply
(POS)?
UAE individual

Lease of car in Germany

UAE registered
business
1. Germany (Art. 30(4))
2. Germany (Art. 30(4))
KSA registered
3. UAE (Art 29)
business
4. KSA (Art. 30(1))
5. Germany (Art. 30(4))
KSA individual
PwC 240
Restaurants, hotels and catering
of food and beverages

Supplier

The place of supply of services in restaurants,

hotels and catering of food and beverages, is
where such services are actually performed

PwC 241
Article 30-5 VAT Law (special rule)

German
Catering French Customer
company

What is the
French Company request a German catering company to Place of Supply
perform its catering services at an event in Abu Dhabi (POS)?

PwC 242
Article 30-5 VAT Law (special rule)

UAE Catering
UAE Customer
Company

What is the
Place of Supply
UAE Company request a UAE catering company to
(POS?
perform its catering services at an event in Paris, France

PwC 243
Cultural, artistic, sports,
educational or any similar
services

Supplier

The supply of any cultural, artistic, sports,

educational or any similar services, is where
such services are performed

PwC 244
Article 30-6 VAT Law (special rule)

French event
company

What is the
Place of Supply
A French event company organizes an international
(POS)?
cultural event in Dubai.

PwC 245
Real Estate

Supplier

The place of supply of services related to real

estate property is the place where the real
estate is located

PwC 246
Real Estate – Article 21 Regulations

PwC 247
Real Estate – Article 21 Regulations – continued

UAE Service UAE Customer

Start reading
Provider A B
Company A performs at 21 clause 3
services as mentioned Regulations
in 21-3-e Regulations
for a real estate project
PwC
in Kazakhstan 248
Transportation Services

Supplier

The place of supply of transport services

is the place where the transport
begins

PwC 249
General Exceptions (continued)

▪ Art. 22 Regulations - Place of Supply of Certain Transport Services

1. The place of the supply of each transportation service is the place where the supply of that
transportation service commences, where a trip includes more than one stop and consists of
multiple supplies in accordance with Clause (5) of Article (4) of this Decision
2. The place of supply of Transport-Related Services shall be the same as the place of supply of
the transportation service to which they relate

Art. 1 Law and/ or Regulations – Transport- related Services

Shipment, packaging and securing cargo, preparation of Customs documents, container

management, loading, unloading, storing and moving of Goods, or any another closely related
services or services that are necessary to conduct the transportation services.

PwC 250
General Exceptions (continued)

Dubai Customer’s
India place in
Customs Transportation of cargo from
Shipping of cargo Sharjah
customs area to customer’s
place

What is the
Place of Supply
(POS)?

PwC 251
General Exceptions (continued)

Dubai Customer’s
India place in
Customs Transportation of cargo from
Shipping of cargo Sharjah
customs area to customer’s
place

• Shipping of cargo: India

What is the • Transport of cargo from customs area to
Place of Supply customer’s premises: UAE
(POS)?

PwC 252
Telecommunication and
Electronic Services

Supplier

The place of supply of

telecommunications, broadcasting and
electronic services is where the
services are used and enjoyed.

PwC 253
Place of Supply of Telecommunications and Electronic
Services – Article 31 VAT Law
Details in
Regulations

UAE

UAE Gaming UK
company
China
PwC 254
Example Electronic Services

Live training online

delivered over the internet Student (individual) in
– trainer in UAE Switzerland

What is the
Place of Supply
(POS)?
PwC 255
Example (continued)

UAE Architect UAE Individual

Work re:
Apartment in Oman Owns

Apartment in
Oman

PwC 256
Example (continued)

Catering on
Gordon Party held in
Omani couple’s marriage
Ramsey UAE

PwC 257
 Reverse Charge
Mechanism

PwC
Supply of Services - Reverse Charge Mechanism (RCM) Extra
relevant
when
recipient
Recipient of does not
Service Fee: have 100%
UAE Law Firm AED 10.000 + Services in
UAE recovery
500 VAT (5%) right

Recipient of
Oman Law Service Fee: Services
Firm AED 10.000 registered for
Tax

Is it
Should the If yes, UAE How is this
therefore
Is there VAT Omani firm or Omani Registration ‘’solved’’
‘’cheaper’’ to
in Oman? charge VAT (if in UAE? by the
buy from
VAT? any) legislation
there
PwC 259
Normal supply of services / Not Reverse Charge Mechanism

Supply of services for AED 100 + 5 VAT

Supplier Recipient UAE,
UAE registered for tax
Supplier collects 105 AED from Buyer

AED 5 to FTA AED 5 from FTA

FTA

VAT return of supplier VAT return of buyer

Output Standard rated 100 5 Output Standard rated - -
supplies supplies
Input Standard rated - - Input Standard rated 100 -5
expenses expenses
Totals 100 5 payable Totals 100 -5 claimable

Remits collected AED 5 VAT to the FTA Buyer recovers the input VAT from FTA
PwC 260
Reverse Charge Mechanism for Services

Supply of services for 100 AED

Registered
Supplier
Recipient UAE
UK Supplier collects 100 AED from Recipient registered for tax

FTA

VAT return of supplier in UK VAT return of buyer in the UAE

Output Supplies Subject to 100 5
Output zero rated 100 0 RCM
supplies
Input Standard rated 100 -5
Input Standard rated - - expenses (box 10)
expenses
Totals 0 0 Not
Totals 100 0 Not payable or
payable or claimable
claimable

PwC 261
From FTA Taxable Person Guide – Example
XYZ LLC is a VAT registered business in the UAE. They
purchase consultancy services from a law firm in US for USD
10,000.
US
What is the POS?

What is the UAE VAT implication?

Central Bank Exchange Rate UAE

VAT return XYZ LLC
USD 1 = AED 3.6725

Date
PwC 262
From FTA Taxable Person Guide – Example
XYZ LLC is a VAT registered business in the UAE. They
purchase consultancy services from a law firm in US for USD
10,000.
US
What is the POS?

What is the UAE VAT implication?

Central Bank Exchange Rate VAT return XYZ LLC

UAE
Output Supplies Subject 36,725 1,836.75
USD 1 = AED 3.6725 to RCM (Box 3 )
Input Standard rated 36,725 -1,836.75
expenses (Box
USD 10,000 = AED 36,725 10)
Totals 0 0 Not
payable or
claimable
Date
PwC 263
 Reporting

PwC
Reporting – Article 71 GCC Agreement –
Electronic Service System

PwC 265
Reporting – Article 71 GCC Agreement –
Electronic Service System (continued)

PwC 266
Thank you

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