UAE VAT Regulations Amended
02 July 2020
The Federal Tax Authority has issued Cabinet Decision No. 46 of 2020 to amend the Executive Regulations for VAT.
The decision makes a change to Article 31, Clause 2 of the Regulations, which is part of the zero-rating for ‘exported services’.
Article 31 allows certain services to be zero-rated if the customer is outside the UAE. Previously, the customer was considered to be outside the UAE if they had a short-term presence in the UAE of less than a month, OR if the only presence they had in the UAE was not effectively connected with the supply.
The Clause has been amended to replace the word “or” with the word “and”. This narrows the scope by requiring both conditions to be met.
This amendment impacts UAE business with clients visiting the UAE for short periods in relation to services provided by the company. This might include professional services providers, financial services businesses, agents and marketing businesses.
If your business may be affected by the amendment and you would like further advice, please contact Shivendra Jha, Brian Conn, Verona Hoh and Mufaddal Safdari
Sources:
Regulations