Place of supply is a crucial concept in VAT Registration. It refers to the location where the supply is deemed to occur. The place of supply determines if tax applies to the supply. The principles for identifying the place of supply vary for goods and services. There are also specific guidelines for certain supplies. Let’s understand how to determine the place of supply for goods under UAE VAT.

The place of supply for goods can be split into 3 types:

Domestic supplies

Exports

Imports

For domestic supplies, i.e. goods provided to a recipient in the UAE, the place of supply is the UAE. So UAE VAT Registration  applies.

Example: Jehan & Co, a registered dealer in Abu Dhabi, supplies 100 monitors to Noor Electronics, a registered dealer in Dubai, at AED 500 each.

Here, the recipient is in the UAE, so the place of supply is the UAE. This is a taxable supply at 5% VAT Registration uae.

For exports, the place of supply depends on:

Whether it’s outside GCC or to a GCC member

If GCC, whether the recipient is registered for VAT dubai

If GCC and unregistered, whether below the registration threshold

A summary:

Destination | Registered? | Below threshold? | Place of supply

Outside GCC | N/A | N/A | UAE

GCC member | Yes | N/A | Destination state

GCC member | No | No | UAE

GCC member | No | Yes | Destination state

For imports into UAE from outside, the place of supply is the UAE. UAE VAT applies.

Example: Jehan & Co in Abu Dhabi imports 50 phones from India at AED 1500 each.

The place of supply is UAE. Jehan & Co pays 5% VAT dubai on reverse charge basis.

So the place of supply determines the applicable tax invoice. Next we’ll cover services.