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UAE VAT on foreign digital services

E-services VAT obligations for offshore providers and marketplaces

On 1 January 2018, the United Arab Emirates (UAE) implemented a 5% Value Added Tax regime. This included requiring non-resident providers of digital or electronic services via the internet or similar electronic network to charge and remit VAT on their liable income. This liability was extended to electronic marketplaces. The obligation only related to B2C transactions; B2B transactions should be zero-rated and use the reverse charge. There is no requirement for a local Fiscal Representative.

The UAE is one of the six Gulf Cooperation Council (GCC) states that agreed in 2017 to introduce a VAT union. So far, only UAE, Saudi Arabia, Bahrain and Oman have introduced VAT and taxed non-resident digital services. Check VAT Calc’s global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.

What services are liable to VAT in the UAE

Income from the following automated supplies to consumer

  • Download and streaming video or music
  • Digital images
  • E-books and online journals
  • Online gaming
  • Live streaming services
  • Telecoms services
  • Apps
  • Mobile ringtones
  • Advertising
  • SaaS or cloud-based software, hosting, storage
  • Automated e-learning
  • Domain names and hosting
  • Broadcast of  political, cultural, artistic, sporting, scientific, educational or entertainment programs and events

Electronic marketplaces UAE VAT obligations

In addition to providers of digital services, foreign online marketplaces which facilitate the sale of digital services to UAE consumers may become liable for the VAT collections role on behalf of their third-party merchants.

VAT registration and compliance

There is no simplified registration and VAT filings regime in the UAE for non-resident digital services providers. They must apply online with the FTA as normal. VAT returns are generally required on a quarterly basis, with a filing date of the 28th of the month following the reporting quarter.

Non-residents may apply to the FTA for exemptions from the various UAE requirements on invoices and other obligations.

Africa & Middle East VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Algeria 9% Jan 2020 Nil
Angola 14% Oct 2019
Bahrain 10% Jan 2019 Nil
Benin 18% Oct 2023 TBC
Botswana 14% 2024 - Pending implementation
Cameroon 19.5% Jan 2020 XAF 50 million
Cape Verde 15% Jan 2022 Nil
Congo, Democratic Republic 16% Jan 2024 -
Egypt 14% Sep 2016 EGP 500,000
Ghana 12.5% Apr 2022 GHS 200,000
Guinea 18% Jan 2016 Nil
Israel 17% TBC Proposals withdrawn
Ivory Coast 18% 2022 -
Jordan 16% JOD 30,000
Kenya 16% Sep 2013 - Registration threshold removed 2023
Kuwait 5% Jan 2024? - TBC
Madagascar 20% Nil Collections via fiscal rep
Mauritius 15% 2020
Morocco 20% 2024
Mozambique 16% 2017 Nil
Nigeria 7.5% Jan 2020 $25,000
Oman 5% Apr 2021 OMR 35,000
Rwanda 18% TBC
Saudi Arabia 15% Jan 2018 Nil
Senegal 18% Apr 2024 Nil Fiscal representative required
Sierra Leone 15% Jan 2021 SLE 100,000 No non-resident rules
South Africa 15% Jun 2014 ZAR 1 million
Tanzania 18% Jul 2022 Nil Residents since Jul 2015
Tunisia 19% Jan 2020 Nil Withholding VAT; 3% Royalty Tax
Uganda 18% Jan 2020 UGX 150m
United Arab Emirates 5% Jan 2018 AED 375,000
Zambia 16% Jan 2024 Fiscal Representative req'd
Zimbabwe 14.5% Jan 2020 Nil

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