United Arab Emirates
(Cabinet Decision No. 99 of 2022 – Issued 21 Oct 2022 (Effective from 1 Jan 2023))
UAE Federal tax authority (“FTA”) has published Cabinet decision No. 99 of 2022 to amend the UAE VAT executive regulations
The amended provisions will go into effect on January 1, 2023.
Summarized amendments:
| Article | Extract as per previous law | Extract as per amended law | PB Comments |
|---|---|---|---|
| Article 3 – Supply of services |
The supply of anything other than the supply of Goods
shall be regarded as a supply of Services including any
of the following:
1. The granting, assignment, cessation, or surrender
of
a right.
2. The making available of a facility or advantage.
3. Not to participate in any activity, or not to allow
its
occurrence, or agree to perform any activity.
4. The transfer of an indivisible share in a good.
5. The transfer or licensing of intangible rights, for
example rights of authors, inventors, artists, and rights
in trademarks, and rights which the legislation of the
State deems to be within such category.
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A supply of Services shall be every supply that is not considered a
supply of Goods, including any of the following:
a. The granting, assignment, cessation, or surrender
of a right.
b. The making available of a facility or advantage
c. Not to participate in any activity, or not to allow
its occurrence, or
agree to perform any activity.
d. The transfer of an indivisible share in a Good.
e. The transfer or licensing of intangible rights, for
example rights of
authors, inventors, artists, rights in trademarks, and rights which
the
legislation of the State deems to be within such category.
2. As an exception to Clause 1 of this Article, the
functions of a
member of a board of directors, performed by a natural person
appointed as such, for any government entity or private sector
establishment, shall not be considered a supply of Services.
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Clause 2 has been added which
mentions that supply of services by
natural person serving as members of
board of directors will not be
considered as supply of services for
VAT purposes.
FTA has also issued a public
clarification VATP031 document on
the application of these new
provisions related to the services
provided by Directors.
|
| Article 72 – Record Keeping of the Supplies Made | 1. The records of all Goods and Services supplied by
the Taxable Person or on his behalf showing the
Goods and Services, suppliers and their agents, shall
be kept and retained in sufficient detail to enable the
Authority to readily identify Goods and Services,
suppliers, and agents.
2. Without prejudice to Article 78 of the Decree-Law,
the Taxable Person who makes a Taxable Supply of
Goods or Services in the State must keep records of
the transaction to prove the Emirate in which the
Fixed Establishment related to this supply is located.
3. As an exception to Clause 2 above, if the Taxable
Person who makes a Taxable Supply of Goods or
Services does not have a Fixed Establishment in the
State, Taxable Person must keep records of the
transaction to prove the Emirate in which the Supply is
received.
|
1. The records of all Goods and Services supplied by the Taxable
Person or on his behalf showing the Goods and Services, suppliers
and their agents, shall be kept and retained in sufficient detail to
enable the Authority to readily identify Goods and Services,
suppliers, and agents.
2. Without prejudice to Article 78 of the Decree-Law,
the Taxable
Person who makes a Taxable Supply of Goods or Services in the State
must keep records of the transaction to prove the Emirate in which
the Fixed Establishment related to this supply is located.
3. As an exception to Clause 2 of this Article, if the
Taxable Person
who makes any Taxable Supply of Goods or Services does not have a
Fixed Establishment in the State, the following shall apply:
a. If he has a Place of Establishment in the State,
he must keep
records of the transaction to prove the Emirate in which the
Place
of Establishment is located.
b. In the event that he does not have a Place of
Establishment in
the State, he must keep records of the transaction to prove the
Emirate in which the supply is received.
4. As an exception to Clauses 2 and 3 of this
Article, if the
value of
the Taxable Supplies made by the Taxable Person through
electronic commerce exceeded (100,000,000) one hundred million
dirhams during the calendar year, he must keep records of the
transaction to prove the Emirate in which the supply is received
in the period specified in Clause 6 of this Article.
5. For the purposes of Clause 4 of this Article,
electronic commerce
refers to the process of selling Goods or Services through
electronic
means, an electronic platform, a store in social media, or
electronic
applications in accordance with criteria and conditions
determined
by the Minister.
6. For the purpose of implementing the provisions
of Clause 4 of
this Article, the provisions of Taxable Supplies via electronic
commerce shall apply to a Taxable Person as follows:
a. From the first Tax Period that begins on or
after 1 July 2023 for
18 months for the Taxable Person whose Taxable Supplies made via
electronic commerce exceeded the threshold prescribed in Clause
4
of this Article during the calendar year ending 31 December
2022.
b. For two years commencing from the first Tax Period
of the
calendar year that begins after the date on which the Taxable
Supplies made by the Taxable Person through electronic commerce
exceeded the threshold prescribed in Clause 4 of this Article.
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Clause 3 has been revised to clarify
that, if the taxable person's place of
establishment is in UAE the records of
the transaction should be retained to
demonstrate the Emirate in which the
place of establishment is situated.
Clause 4, 5 and 6 have been added to
specify requirements for e-commerce
companies.
Ecommerce companies making
taxable supplies more than AED
100,000,000 are required to keep
records of transactions to prove the
Emirate in which the supply is
received.
These new requirements shall apply:
Starting from the first tax
year commencing on or after
July 1, 2023 and continuing
for 18 months (where the
taxable supplies crossed the
prescribed threshold during
the 2022 calendar year).
For a period of two years
beginning with the first tax
period of the year that comes
after the day the taxable
supplies crossed the AED
100million threshold.
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