UAE FTA Stresses on Accurate Emirate-Specific VAT Reporting in e-Commerce


The FTA, in its VAT Public Clarification VATPO33 that was published on February 24, 2023, stressed more on reporting of e-commerce supplies. In the clarification note, FTA mentioned that a person or business falling under the new taxable regime deals with sound and service supply exceeding AED 100 million and is referred to as the “qualifying registrant”.

As of July 1, 2023, eligible registrants must record e-commerce supplies in box 1 of the VAT Return according to the Emirate in which clients receive the supplies of goods or services, and they must retain any pertinent supporting documentation.

The FTA further stressed that businesses need to carefully consider whether they are subject to the new reporting requirements. Failure to comply or comply with the revised reporting when it is not necessary might lead to errors and incur penalties.

UAE FTA Stresses on Accurate Emirate-Specific VAT Reporting in e-Commerce

Supplies will only come under the e-commerce medium when they meet the following conditions

  • The goods and services are listed on the Internet.
  • The goods and services are ordered via the Internet, whether or not the payment is made online.
  • If the customer specifies a location for the delivery of the goods, the supplier does not own or operate this location.
  • If the customer requests services, the services are rendered, or the customer is granted the right to receive them with little to no assistance from a human.

Insight of New Guidance

Starting July 1 2023, qualifying registrants should inform the Emirates about the e-commerce and non-e-commerce standard rate supplies and the AED 100 million threshold.

The total standard-rated supply for each Emirate, including e-commerce and non-e-commerce, will continue to be the amount stated in each of the applicable Emirates fields under box 1 of the VAT return.

There are two new aspects registrants must comply with-

  • Starting on or after July 1 2023 for 18 months from the first tax-paying period for registrants having exceeded AED 100 million in the previous calendar year.
  • The registrant needs to have the business for at least 2 years from the first tax period on which the registrant exceeded the AED 100 million threshold.

The Federal Tax Authority announced that its tax administration system, or “EmaraTax,” will prepare a set of two questions verifying if they are qualifying registrants for the new e-commerce supplies rules. This will help taxpayers prepare an accurate VAT return.

By doing this double-check, taxpayers may ensure that their VAT filing is correct and prevent penalties or adjustments down the road.

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