United Arab Emirates

United Arab Emirates VAT for digital service providers

Those businesses, who do not have a place of residence in the state of UAE, will have to compulsorily register under VAT irrespective of the registration threshold.

Late – registration penalties

Any taxable person who has not applied for VAT registration within the set time frame shall be fined AED 20,000.

Digital services that are the subject of UAE VAT.

For the purposes of UAE VAT, electronic services include services delivered over an electronic network or marketplace, including the supply of domain names, web hosting, software (including updates), images, music, magazines, advertising space, distance learning and live streaming. The actual use and enjoyment shall be where the recipient consumes and enjoys the services, regardless of the place of contract or payment.

VAT rates

The term “taxable supplies” refers to supplies of goods and services that are subject to VAT and does not include supplies that are exempt from VAT.

In the UAE, the following positive rates of VAT apply:

• Standard rate: (5%)

• Zero rate: (0%)

The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides for the zero rate or an exemption.