Tax rate by default is 5% unless the taxable supply is specifically zero-rated in UAE VAT law.
Scenario 3: Supply of goods from UAE to outside UAE (Export)
Given below are few instances to understand the impact of above-discussed factors in determining the VAT accounting treatment in e-commerce transactions for supply goods from UAE to outside UAE (Export)
• When a supplier is UAE resident and taxable person, VAT will be applicable at 0% and shall be accounted for by the supplier irrespective of residency or registration status of the recipient.
• When a supplier is not a UAE resident and taxable person, VAT will be applicable at 0% and shall be accounted for by the supplier if residency status of recipient is outside UAE irrespective of registration status of the recipient.
• When a supplier is not a UAE resident and taxable person, VAT will be applicable at 0% and shall be accounted for by the recipient if the recipient is a resident and a registered taxable person. This is where the reverse charge mechanisms get triggered.
• When a supplier is not a UAE resident and taxable person, VAT will be applicable at 0% and shall be accounted for by the supplier if the recipient is not a registered taxable person irrespective of the residency status of the recipient.
