Non-resident persons carrying on economic activities through a fixed establishment are required to register for VAT. Non-resident persons without a fixed establishment making taxable supplies in UAE are required to register, unless there is a UAE resident person responsible for accounting for VAT on the supplies. There is no registration threshold for non-resident suppliers without a fixed establishment. If there is no resident representative and a non-resident supplier is not registered in UAE, then the supply of services is subject to VAT under the reverse charge mechanism. The recipient of the services is responsible for charging VAT under reverse charge. This includes supplies from non-residents that are resident in the GCC Member States.

Digital Supplies

A non-resident without a fixed establishment in UAE providing electronic services to a non-VAT-registered customer in UAE (B2C) is required to register for VAT. In case of supply of electronic services to VAT-registered customers (B2B), the VAT is payable by the UAE customer on a reverse charge basis.

Electronic services mean services which are automatically delivered over the internet, an electronic network, or an electronic marketplace, including:

• Supply of domain names, web-hosting, and remote maintenance of programs and equipment;
• Supply and updating of software;
• Supply of images, text, and information provided electronically, such as photos, screensavers, electronic books, and other digitized documents and files;
• Supply of music, films, and games on demand;
• Supply of online magazines;
• Supply of advertising space on a website and any rights associated with such advertising;
• Supply of political, cultural, artistic, sporting, scientific, educational or entertainment broadcasts, including broadcasts of events;
• Live streaming via the internet;
• Supply of distance learning; and
• Services of an equivalent type which have a similar purpose and function.

Similar to the supply of electronic goods, the supply of electronic services may either be made directly or through electronic marketplaces. Electronic marketplaces may either sell goods or services themselves or act as intermediaries between the supplier and the recipient of goods or services. The VAT obligation differs based on the functions performed by the electronic marketplace (see Sec. 12.1.).