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  • Tag Archive: Reverse Charge

    1. UAE Reverse Charge Mechanism for Electronic Devices

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      UAE Reverse Charge – Introduction


      In a recent development, the United Arab Emirates (UAE) Cabinet of Ministers introduced Cabinet Resolution No. (91) of 2023, implementing a domestic reverse charge mechanism for electronic devices. 


      This resolution takes effect on 25 August 2023, and brings about changes in the way electronic devices are supplied and accounted for in the UAE.


      What Falls Under Electronic Devices?


      Electronic devices, as defined in the resolution, encompass mobile phones, smartphones, computers, tablets, and their associated parts and components. 


      The application of the reverse charge mechanism hinges on specific conditions that must be met.


      When Does the Reverse Charge Apply?


      This reverse charge mechanism applies when:


      1. A VAT registered supplier in the UAE makes a supply of electronic devices to another registered recipient (B2B supply).
      2. The recipient intends to either resell these devices or employ them in the production or manufacturing of electronic devices.
      3. Prior to the supply date, the recipient must furnish the supplier with a written declaration. This declaration must confirm two key points: (1) the intended use of electronic devices for resale or manufacturing and (2) the recipient’s VAT registration with the Federal Tax Authority.
      4. The supplier must not only receive and maintain this declaration but also verify the recipient’s VAT registration through the approved methods established by the Federal Tax Authority.


      UAE Reverse Charge – Effective Date


      This decision took effect from 30 October 2023. 


      UAE Reverse Charge – Conclusion


      As such, businesses involved in electronic device supply, be it for resale or production, should act proactively to align their processes and adapt their accounting and reporting systems accordingly. 


      By doing so, they can ensure seamless compliance with these new provisions, avoid discrepancies, and ultimately maintain the efficiency of their business operations.


      If you have any queries about the UAE reverse charge, or UAE tax matters in general, then please get in touch.