The establishment of VAT on 1st January 2018 has made drastic changes in the business world in UAE. Considering the VAT on Exports, there is still a great deal of uncertainty.
VAT filing for export of services and export of goods is different, this is the most important part to understand while exporting and it can help you avoid fines from FTA .
It is always wise to file your VAT under the supervision of a Auditing company. If you have any confusion regarding VAT on export of services outside GCC countries, then this article may help you to clear the confusion.
Are Services performed outside UAE:
Taxable or zero-rated? The VAT on services exported outside of GCC nations will be regarded as zero-rated under the FTA. This indicates that the service provider is authorized to claim input tax credits on the inputs used to deliver the service. Additionally, there will be no tax on services exported. You can determine the VAT on your exported services with the aid of tax agents in Dubai. To take advantage of the zero-rating on the export of services outside the GCC region, you must, however, fulfill specific requirements as outlined in the UAE VAT legislation.
Requirements for VAT on services exported outside of the GCC
For the treatment of service exports outside of GCC nations, the following two requirements must be satisfied :
1. The beneficiary of the service must be outside of the UAE and not have a residence in a GCC State at the time the services are provided.
According to UAE VAT regulation the person who receives the services should not be staying in the UAE at the time of when service is provided. Secondly the receiver must not have any place of residence or place or establishments in the GCC Countries.
However, if the receiver has a temporary presence in the UAE for less than a month or if their stay is unrelated to the relevant delivery of services, they shall be considered to be outside the UAE. The provision of services in this instance qualifies for zero-rated VAT treatment.
2.The provided services must not be related to or directly related to real estate or transportable personal property in any way.
The second requirement specifies that the services offered to the entity outside of the GCC cannot be connected to any real estate in the UAE or any alteration or development of such real estate. Additionally, there should be no connection at all between the exported services and real estate or portable personal property. Before completing the transaction, service providers and beneficiaries must take into account certain requirements.
While filing VAT returns, businesses must carefully assess whether the VAT on the services rendered will be treated as zero-rated or not. Such an assessment is tough to perform without the assistance of VAT consultants in Dubai.
It may be crucial for a business organization to check whether VAT on the services rendered is eligible for zero rated taxes. But it can be easily done with the help of an experienced VAT registration dubai like UBL Accounting and Auditing.
If you have any confusion regarding VAT registration UAE or require any services regarding accounting and auditing feel free to contact us